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

question 28

Multiple Choice

Seven months ago,Freda purchased 400 shares of stock on margin at a price per share of $36.The initial margin requirement on her account is 70 percent and the maintenance margin is 40 percent.The call money rate is 4.4 percent and she pays 2 percent above that rate.Today,she sold these shares for $37.50 each.What is her annualized rate of return?

• A)7.50 percent
• B)7.61 percent
• C)14.37 percent
• D)16.90 percent
• E)17.42 percent