You Purchased a Stock for $19

question 68

Multiple Choice

You purchased a stock for $19.75 a share using 70 percent margin. You sold the stock seven months later for $20.80 a share. You did not receive any dividend income. What was your holding period percentage return on this investment? Ignore trading costs and margin interest.

• A) 5.77 percent
• B) 6.12 percent
• C) 7.59 percent
• D) 8.75 percent
• E) 9.13 percent

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Definitions:

Shipping Costs

Expenses associated with the delivery of goods from the manufacturing point to the customer or distribution center.

Variable Manufacturing Cost

Costs that fluctuate with the level of production output, such as raw materials and direct labor.

Fixed Manufacturing Cost

Overheads that do not change with the level of manufacturing output, including salaries of permanent staff and rent.

Annual Impact

The effect or influence that something has over the course of a year, often used in the context of financial, environmental, or social effects.