Back to Assignment

Attempts

Keep the Highest $1/2$

Problem $3-06$

eBook

Problem $3-06$

Two years ago, you bought $700$ shares of Kayleigh Milk Co$.$ for $$25$ a share with a margin of $75$ percent. Currently, the Kayleigh stock is selling for $$50$ a

share. Assume there are no dividends and ignore commissions. Do not round intermediate calculations. Round your answers to two decimal places.

a$.$ Assumina that vou pay cash for the stock, compute the annualized rate of return on this investment if you had paid cash.

$\%$

b$.$ Assuming that you used the maximum leverage in buying the stock, compute the annualized rate of return with the margin purchase.

$\%$