You paid cash for $1,200 worth of stock a year ago. Today the portfolio is worth...
You paid cash for $1,200 worth of stock a year ago. Today the portfolio is worth $1,642.
a. What rate of return did you earn on the investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Rate of return %
b. Now suppose that you bought the same stock but bought it on margin. The initial margin requirement was 70%. Recalculate your rate of return, ignoring any interest due. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Rate of return %
c. Recalculate the rates of return for a cash purchase in the event that the stock is worth $900 today. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Rate of return %
d. Recalculate the rates of return for a margin purchase in the event that the stock is worth $900 today. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Rate of return %
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