An investor buys $3,000 worth of a stock priced at $30 per share using 40%...
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An investor buys $3,000 worth of a stock priced at $30 per share using 40% initial margin. The broker charges 5% on the margin loan and requires a 30% maintenance margin. The stock pays a $1.00-per-share dividend in 1 year, and then the stock is sold at $35 per share. What was the investor's rate of return?
| A. | 16.7% | |
| B. | 20% | |
| C. | 42.5% | |
| D. | 33.3% | |
| E. | 30% |
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