Seven Months Ago, You Purchased 400 Shares of Stock on Margin

question 50

Multiple Choice

Seven months ago, you purchased 400 shares of stock on margin. The initial margin requirement on your account is 60% and the maintenance margin is 30%. The call money rate is 4.8% and you pay 1.85% above that rate. The purchase price was $16 a share. Today, you sold these shares for $18.00 each. What is your annualized rate of return?

• A)26.15%
• B)33.35%
• C)42.77%
• D)56.87%
• E)64.64%

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