Question
Youve just opened a margin account with $18,000 at your local brokerage firm. You instruct your broker to purchase 650 shares of Landon Golf stock,
Youve just opened a margin account with $18,000 at your local brokerage firm. You instruct your broker to purchase 650 shares of Landon Golf stock, which currently sells for $55 per share. Suppose the call money rate is 5 percent and your broker charges you a spread of 1 percent over this rate. You hold the stock for 6 months and sell at a price of $62 per share. The company paid a dividend of $0.62 per share the day before you sold your stock. 1. What is your total dollar return from this investment? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Dollar return $
What is your effective annual rate of return? (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Effective annual return %
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