You paid cash for $1,600 worth of stock a year ago. Today the portfolio is worth $2,626. a. What rate of return did you earn on the investment? (Negative value should be indicated by 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 65%. Recalculate your rate of return, ignoring any interest due. (Negative valu 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 $825 today. (Negative value should be indicated by a minus sign. Round your answer to 2 decin places.)

You paid cash for $1,600 worth of stock a year ago. Today the portfolio is worth $2,626. a. What rate of return did you earn on the investment? (Negative value should be indicated by 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 65%. Recalculate your rate of return, ignoring any interest due. (Negative valu 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 $825 today. (Negative value should be indicated by a minus sign. Round your answer to 2 decin places.)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 13P

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