Determine your effective annual rate of return

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Reference no: EM132048597

You've just opened a margin account with $15,000 at your local brokerage firm.

You instruct your broker to purchase 650 shares of Landon Golf stock, which currently sells for $48 per share. Suppose the call money rate is 6 percent and your broker charges you a spread of 1.5 percent over this rate.

You hold the stock for 4 months and sell at a price of $55 per share. The company paid a dividend of $ 27 per share the day before you sold your stock.

What is your total dollar return from this investment? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

What is your effective annual rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Reference no: EM132048597

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