What rate of return did you earn on the investment

Assignment Help Finance Basics
Reference no: EM132130972

 

You paid cash for $1,300 worth of stock a year ago. Today the portfolio is worth $1,888.

a. What rate of return did you earn on the investment?

b. Now suppose that you bought the same stock but bought it on margin. The initial margin requirement was 75%. Recalculate your rate of return, ignoring any interest due.

c. Recalculate the rates of return for a cash purchase in the event that the stock is worth $925 today.

d. Recalculate the rates of return for a margin purchase in the event that the stock is worth $925 today

 

Reference no: EM132130972

Questions Cloud

Calculating returns : Suppose you bought a bond with a 5.8 percent coupon rate one year ago for $1,030. The bond sells for $1,059 today.
How much will the winner receive in 2051 : If the winner's purse continues to increase at the same interest rate, how much will the winner receive in 2051?
What is the most you should pay for the annuity : You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity?
How much will you have in your account : Five years from today, you plan to invest $4,900 for 8 additional years at 7.8 percent compounded annually. How much will you have in your account
What rate of return did you earn on the investment : You paid cash for $1,300 worth of stock a year ago. Today the portfolio is worth $1,888.
Earn an annual rate : You've finally decided to retire at the ripe old age of 50, and due to some fancy investing, you have accumulated $750,000 in mutual funds.
What is the market value of equity : What is the market value value of the company prior to the recap and what is the market value of equity?
What price shoukd the company expect : What price shoukd the company expect its existing shares shares to sell immediately after the announcement? (I'm not supposed to round intermediate calculations
Announcement is this expected gain or loss : What percentage of the value of the company's existing equity prior to the announcement is this expected gain or loss?

Reviews

Write a Review

Finance Basics Questions & Answers

  How much does he need to invest

Dan would like to save $2,000,000 by the time he retires in 40 years and believes he can earn an annual return of 8%. How much does he need to invest today to achieve his goal?

  Required return on unlevered equity

Using Modigliani and Miller's Proposition II, determine the required return on unlevered equity.

  Why target senior debt rating of single is prudent objective

Explain why a target senior debt rating of single-A is a prudent objective when there is only a very limited new issue market for non-investment-grade debt, and when investor willingness to purchase triple-B-rated debt is likely to be highly sensi..

  Determining the annual compounding

a. How many units of each bond does Sylvio need to buy or sell? b. How much will Sylvio get to spend on the cruise?

  Review problem and find the yield to call

Zee Corporation recently issued 20-year bonds. The bonds have a coupon rate of 8 percent and pay interest semiannually. Also, the bonds are callable in 6 years.

  Discuss about the major regulatory organizations

Identify the major regulatory organizations that are involved with the daily operations of the investment securities industry.

  Find the first and last date of the maintenance period

Colonial Bank's average daily net transaction account balance calculated over the period beginning on Tuesday January 3 and ending on Monday January 16th.

  Recommend and justify an approach to asset allocation that

sam short cfa has recently joined the investment management firm of green spence and smith gss. for several years gss

  What is the effect of the new project on value of stock

Assuming that the project is new information that it is independent of other expectations about the company,, what is the effect of the new project on the value of the stock?

  Financial decisions on southwick current

a. The firm reduces its inventories by $500,000 through more efficient inventory management procedures and invests the proceeds in marketable securities.

  Which method do you feel is most appropriate

Calculate Palmer's inventory turnover using beginning of year inventory, end of year inventory, and a monthly average inventory. Which method do you feel is most appropriate? Why?

  What is mcfrugal degree of operating leverage at a sales

McFrugal, Inc. has expected sales of $20 million. Fixed operating costs are $2.5 million, and the variable cost ratio is 65 percent. Mcfrugal has outstanding a $12 million, 8 percent bank loan. The firm also has outstanding 1 million shares of common..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd