You have opened an account with a local broker & you placed an order for 4,000.0 shares of KLM corp. @ $8.0 a share. The initial margin is 50.0%; the broker's rate is 6.0% and the maintenance margin is 30.0%. If you keep the stock for one year & the stock price goes up to $12.0 a share, you annual return would be:- Select one: O a. 78.0% O b. 100.0% O c. 85.0% O d. 94.0% E + 71 More

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
icon
Related questions
icon
Concept explainers
Topic Video
Question

You have opened an account with a local broker & you placed an order for 4,000.0 shares of KLM corp. @ $8.0 a share. The initial margin is 50.0%; the broker's rate is 6.0% and the maintenance margin is 30.0%. If you keep the stock for one year & the stock price goes up to $12.0 a share, you annual return would be:- Select one: O a. 78.0% O b. 100.0% O c. 85.0% O d. 94.0% E + 71 More

You have opened an account with a local
broker & you placed an order for 4,000.0
shares of KLM corp. @ $8.0 a share. The
initial margin is 50.0%; the broker's rate is
6.0% and the maintenance margin is
30.0%.
If you keep the stock for one year & the stock
price goes up to $12.0 a share, you annual
return would be:-
Select one:
O a. 78.0%
O b. 100.0%
O c. 85.0%
O d. 94.0%
Transcribed Image Text:You have opened an account with a local broker & you placed an order for 4,000.0 shares of KLM corp. @ $8.0 a share. The initial margin is 50.0%; the broker's rate is 6.0% and the maintenance margin is 30.0%. If you keep the stock for one year & the stock price goes up to $12.0 a share, you annual return would be:- Select one: O a. 78.0% O b. 100.0% O c. 85.0% O d. 94.0%
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Stock Valuation
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education