Problem 2-14 Margin and Leverage (LO3, CFA4) Suppose you purchase 500 shares of stock at $48 per share with an initial cash investment of $8,000. The call money rate is 5 percent and you are charged a 1.5 percent premium over this rate. Ignore dividends. a. Calculate your return on investment one year later if the share price is $56. Suppose instead you had purchased $8,000 of stock with no margin. What would your rate of return have been now? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Rate of Return With margin Without margin b. Calculate your return on investment one year later if the share price is $48. Suppose instead you had purchased $8.000 of stock with no margin. What would your rate of return have been now? (A negative value should be indicated by a minus sign. Do not round Intermediate calculations. Enter your answers as a percent rounded to the nearest whole number.) Rate of Return With margin Without margin o otv MacBook Pro C Search or type URL 3 $ 4 5 6 7 8 9 0 E R T Y 0 S D F G H J K V B N M