Question
Youve just opened a margin account with $25,200 at your local brokerage firm. You instruct your broker to purchase 500 shares of Landon Golf stock,
Youve just opened a margin account with $25,200 at your local brokerage firm. You instruct your broker to purchase 500 shares of Landon Golf stock, which currently sells for $84 per share. Suppose the call money rate is 7 percent and your broker charges you a spread of 1.25 percent over this rate. You hold the stock for six months (or 180 days) and sell at a price of $91 per share. The company paid a dividend of $0.46 per share the day before you sold your stock.
What is your total dollar return from this investment?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
What is your effective annual rate of return?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
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