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Question
At the beginning of 2010, Sally purchased Besham stock on margin. The initial margin requirement is 60 percent and the broker loan rate is 10 percent. Sally invested $15,000 of her own funds and margined the maximum amount allowed by the broker to purchase Besham stock. At the time, the purchase price of the stock was $50 a share. No dividends were paid during the year, and the stock was sold for $48 a share at the end of the 2010. What is the one-year holding period return for this investment?
a. 60.0%
b. 10.0%
c. 4.0%
d. 6.7%
e. 0.0%
Answer
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Related questions
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