Suppose You Buy a Round Lot of DG Solutions Stock

question 87

Multiple Choice

Suppose you buy a round lot of DG Solutions stock on 60% margin when it is selling at $55 a share.The broker charges a 10 percent annual interest rate and commissions are 3 percent of the total stock value on both the purchase and the sale.If at year end you receive a $1.10 per share dividend and sell the stock for 55 5/8,what is your rate of return on the investment?

• A) -10.38%
• B) -12.84%
• C) -10.95%
• D) 21.84%
• E) 28.38%

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Definitions:

High-Risk

Situations, activities, or choices that carry a significant potential for negative outcomes or harm.

Homogenously

In a manner that is uniform or of the same kind throughout.

Cognitive Processes

Mental activities involved in the acquisition, processing, storage, and retrieval of information, including perception, memory, language, and problem-solving.

Identical

Exactly the same, without any difference. This term is often used in the context of twins derived from the same fertilized ovum and thus sharing the same genetic material.