You’ve just opened a margin account with $13,475 at your local brokerage firm. You instruct your broker to purchase 550 shares of Landon Golf stock, which currently sells for $49 per share. Suppose the call money rate is 6 percent and your broker charges you a spread of 1.25 percent over this rate. You hold the stock for three months (or 90 days) and sell at a price of $56 per share. The company paid a dividend of $0.28 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.
You’ve just opened a margin account with $13,475 at your local brokerage firm. You instruct your broker to purchase 550 shares of Landon Golf stock, which currently sells for $49 per share. Suppose the call money rate is 6 percent and your broker charges you a spread of 1.25 percent over this rate. You hold the stock for three months (or 90 days) and sell at a price of $56 per share. The company paid a dividend of $0.28 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.
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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You’ve just opened a margin account with $13,475 at your local brokerage firm. You instruct your broker to purchase 550 shares of Landon Golf stock, which currently sells for $49 per share. Suppose the call money rate is 6 percent and your broker charges you a spread of 1.25 percent over this rate. You hold the stock for three months (or 90 days) and sell at a price of $56 per share. The company paid a dividend of $0.28 per share the day before you sold your stock.
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What is your total dollar return from this investment?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
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