Question: Return to Problem 2-16 Margin and Leverage (LO3, CFA4) Suppose the call money rate is 4.5 percent, and you pay a spread of 25 percent
Return to Problem 2-16 Margin and Leverage (LO3, CFA4) Suppose the call money rate is 4.5 percent, and you pay a spread of 25 percent over that. You buy 1,000 shares of stock at $63 per share. You put up $44,100. One year later, the stock is selling for $75 per share and you close out your position. What is your return assuming a dividend of $0.91 per share is paid? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Rate of 6529%
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