Question: Problem 2-16 Margin and Leverage (LO3, CFA4) Suppose the call money rate is 4 5 percent, and you pay a spread of 2.5 percent over
Problem 2-16 Margin and Leverage (LO3, CFA4) Suppose the call money rate is 4 5 percent, and you pay a spread of 2.5 percent over that. You buy 600 shares of stock at $44 per share. You put up $14,520. One year later, the stock is selling for $56 per share and you close out your position. What is your return assuming a dividend of $0.22 per share is paid? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Rate of return,%)
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