Two years ago, you bought 300 shares of Kayleigh Milk Co. for $30 a share with a

Question:

Two years ago, you bought 300 shares of Kayleigh Milk Co. for $30 a share with a margin of 60 percent. Currently, the Kayleigh stock is selling for $45 a share. Assuming no dividends and ignoring commissions, compute

(a) The annualized rate of return on this investment if you had paid cash,

(b) Your rate of return with the margin purchase.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Investment Analysis and Portfolio Management

ISBN: 978-0538482387

10th Edition

Authors: Frank K. Reilly, Keith C. Brown

See More Books

Question Posted: Dec 17, 2014 10:34 AM

See More Questions

You bought 300 shares of General Electric (GE) stock at $3,200 on April 30, 2009. Your intention is to keep the stock until it doubles in value. If you expect 8% annual growth for GE stock, how many...
Angie Cowler bought 300 shares of INV stock four years ago when it was selling for $10 per share. At that time, she really believed that the stock was a diamond in the rough, so she borrowed to...
The drawing shows a jet engine suspended beneath the wing of an airplane. The weight W of the engine is 10 200 N and acts as shown in the drawing. In flight the engine produces a thrust T of 62 300 N...
Perform pairwise comparisons of the treatment means in Exercise 11.12 by using Tukey simultaneous 95 percent confidence intervals. Which brand(s) are most durable? Find a 95 percent confidence...
Thorpe Company produces wireless phones. One model is the miniphone'a basic model that is very small and slim. The miniphone fits into a shirt pocket. Another model, the netphone, has a larger...
Refer to Problem 11.2. What are the standard errors of the regression coefficients for the model developed from the estimation data? How do they compare with the standard errors for the model in...
A snowmobile manufacturer produces three models, the XJ6, the XJ7, and the XJ8. In any given production-planning week, the company has 40 hours available in its final testing bay. Each XJ6 requires 1...
In the year just ended, Gemini Motor Parts had sales of $5,000,000 and incurred a cost of goods sold equal to $4,500,000. The firm's operating expenses were $130,000 and it has $1,000,000 in...
Discuss the naming conventions used for ER schema diagrams.
You own 200 shares of Shamrock Enterprises that you bought at $25 a share. The stock is now selling for $45 a share. a. You put in a stop loss order at $40. Discuss your reasoning for this action. b....
The stock of the Madison Travel Co. is selling for $28 a share. You put in a limit buy order at $24 for one month. During the month the stock price declines to $20, then jumps to $36. Ignoring...
Cousins, Inc. sells ladies clothing. Customers may pay with (1) cash or check, (2) national credit card (which charges a 1%servicefee), or (3) in house credit with terms 2/10, n/30. The following are...
Cordeio, Inc., is a controlled foreign corporation (CFC) for the entire tax year. Yancy Company, a U.S. corporation, owns 75% of Cordeio's one class of stock for the entire year. Cordeio's Subpart F...
In accordance with DAU Directive 704, you are required to do your own work and not use, obtain or provide any unauthorized assistance on this exam.
Identify the sources that can be used to develop an expectation for an analytical procedure.
Journal Prompt for Unit 3 After reviewing all the material in this Unit and completing your two assignments (paper and assignment), how has your view of the role of dance in your life changed?
Your boss, the CIO of an innovative sovereign pension fund, asks you to prepare a report on the benefits of factor investing. In particular, the CIO asks you to create an active portfolio that...
Complete the notations for the following processes. (a) 24Mg(d, a)? (b) 26Mg(d,p)? 40 (c) 4 Ar(p)? (d) C(d, n)? (e) 130 Te(d, 2n)? (f) 55Mn(n, y)? (g) 5 Co(n, a)? 59
Ball bearings are widely used in industrial applications. You work for an industrial food machinery manufacturer and your role is to design the driveshaft assembly on a new type of equipment that...
Which of the following is a purpose of admission-seeking questions? 1. To develop the proper theme that will achieve the desired confession 2. To determine if a Miranda warning is required 3. To...
Union Financial Services, Inc., purchased the following trading securities during 2009, its first year of operations: The market price per share for the trading security portfolio on December 31,...
The income statement for Harris Company was as follows: The balance sheet dated December 31, 2009, showed a Retained Earnings balance of $823,000 and a Valuation Allowance for Trading Investments...
The investments of Charter Inc. include 10,000 shares of Wallace Inc. common stock purchased on January 10, 2010, for $30 per share. These shares were classified as available-for sale securities. As...
Solve problems involving operations with positive and negative fractions and mixed numbers, including problems involving formulas 3 1/2 x - 4/5
In Topic 1: Decision Analysis of Module 2, the importance of using the six steps to follow in decision making was discussed. In addition, as part of the theme, the criteria to be used in...
Whats is 8800 kg/m3 and 880 kg/m3 in kg/mm3?how is the conversion done?

Two years ago, you bought 300 shares of Kayleigh Milk Co. for $30 a share with a

Question:

Step by Step Answer:

a Assuming that you pay cash for the stock This is ...View the full answer

Investment Analysis and Portfolio Management

Students also viewed these Accounting questions