Youve just opened a margin account with $20,000 at your local brokerage firm. You instruct your broker to purchase 500 shares of Landon Golf stock, which currently sells for $60 per share. Suppose the call money rate is 5 percent and your broker charges you a spread of 1.25 percent over this rate. You hold the stock for six months and sell at a price of $65 per share. The company paid a dividend of $.25 per share the day before you sold your stock.

What is the Dollar Return?

What is the effective annual Return?