Question
Youve just opened a margin account with $14,000 at your local brokerage firm. You instruct your broker to purchase 700 shares of Landon Golf stock,
Youve just opened a margin account with $14,000 at your local brokerage firm. You instruct your broker to purchase 700 shares of Landon Golf stock, which currently sells for $61 per share. Suppose the call money rate is 5.5 percent and your broker charges you a spread of 1.25 percent over this rate. You hold the stock for 3 months and sell at a price of $67 per share. The company paid a dividend of $.52 per share the day before you sold your stock. |
1. | What is your total dollar return from this investment?(Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) |
Dollar return | $ |
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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