Question: Problem 2-22 Calculating Returns (CFA1) You've just opened a margin account with $12,100 at your local brokerage firm. You instruct your broker to purchase 1,000

Problem 2-22 Calculating Returns (CFA1)

You've just opened a margin account with $12,100 at your local brokerage firm. You instruct your broker to purchase 1,000 shares of Landon Golf stock, which currently sells for $22 per share. Suppose the call money rate is 6.5 percent and your broker charges you a spread of 1.5 percent over this rate. You hold the stock for six months and sell at a price of $29 per share. The company paid a dividend of $.34 per share the day before you sold your stock.

a.What is your total dollar return from this investment?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

dollar return =

b.What is your effective annual rate of return?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

effective annual return=

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