Assume the investor buys 100 shares of stock for $10 a share and sells it...
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Finance
Assume the investor buys 100 shares of stock for $10 a share and sells it for $14. Also, assume the margin requirement is 60%, the commission rate is 5% of the purchase or sale price, the interest rate is 10% and the stock pays a dividend of $1.00 a share.
What is your rate of return on the stock if it is:
a. a cash purchase?
b. a margin purchase?
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