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. VWhat is your rate of return on this investment? *

. VWhat is your rate of return on this investment? *

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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B. You invest $6,000 in ABC stock. You also borrowed an additional $8,000 to increase your investment in ABC. The interest rate on the loan is 10%. You purchased the stock at $20 per share and hold it for one year. At the end of the year, you sold the stock at $30 per share. What is your rate of return on this investment? Enter your answer 9. An investor puts up $5,000 but borrows an equal amount of money from their broker to double the amount invested in ABC stock. The broker charges 7% on the loan. The stock was originaily purchased at $25 per share and in one year the investor sells the stock for $28. The trading cost is $0.2 per share. ABC stock pays dividends of $0.4 per share. The investor's rate of return was Enter your answer
Transcribed Image Text:B. You invest $6,000 in ABC stock. You also borrowed an additional $8,000 to increase your investment in ABC. The interest rate on the loan is 10%. You purchased the stock at $20 per share and hold it for one year. At the end of the year, you sold the stock at $30 per share. What is your rate of return on this investment? Enter your answer 9. An investor puts up $5,000 but borrows an equal amount of money from their broker to double the amount invested in ABC stock. The broker charges 7% on the loan. The stock was originaily purchased at $25 per share and in one year the investor sells the stock for $28. The trading cost is $0.2 per share. ABC stock pays dividends of $0.4 per share. The investor's rate of return was Enter your answer
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