Louis Purchased 300 Shares of Stock on Margin for $22

question 49

Multiple Choice

Louis purchased 300 shares of stock on margin for $22.15 a share and sold the shares eleven months later for $24.50 a share. The initial margin requirement was 75% and the maintenance margin was 30%. The interest rate on the margin loan was 8.5%. He received no dividend income. What was his holding period return?

• A)7.05%
• B)8.45%
• C)9.88%
• D)10.76%
• E)11.56%