Question
Youve just opened a margin account with $12,000 at your local brokerage firm. You instruct your broker to purchase 600 shares of Landon Golf stock,
Youve just opened a margin account with $12,000 at your local brokerage firm. You instruct your broker to purchase 600 shares of Landon Golf stock, which currently sells for $76 per share. Suppose the call money rate is 6.5 percent and your broker charges you a spread of 1.5 percent over this rate. You hold the stock for 5 months and sell at a price of $81 per share. The company paid a dividend of $.31 per share the day before you sold your stock. 1. What is your total dollar return from this investment? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) Dollar return $ 2206.16 2. What is your effective annual rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Effective annual return %
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