Five Months Ago, You Purchased 300 Shares of Stock on Margin

question 31

Multiple Choice

Five months ago, you purchased 300 shares of stock on margin. The initial margin requirement on your account is 60 percent and the maintenance margin is 30 percent. The call money rate is 4.2 percent and you pay 1.75 percent above that rate. The purchase price was $18 a share. Today, you sold these shares for $20.50 each. What is your annualized rate of return?

• A) 26.15 percent
• B) 59.65 percent
• C) 62.77 percent
• D) 68.87 percent
• E) 74.64 percent

---

Definitions:

Legal Considerations

Aspects that involve or are influenced by laws, regulations, and legal principles, often requiring attention in decision-making processes and business planning.

Site Selection

The process of determining the best location for a business or facility based on various factors like demographics, costs, and regulatory environment.

Distribution Channel

The series of intermediaries a product passes through when going from producer to consumer.

Direct

Pertains to a straightforward or unmediated approach in marketing, selling, or communication, often involving direct interaction with customers or clients.