Two Months Ago, Trevor Purchased 500 Shares of Stock at a Cost

question 60

Multiple Choice

Two months ago, Trevor purchased 500 shares of stock at a cost per share of $74.20. The purchase was made on margin with an initial margin requirement of 65 percent. Trevor pays 1.6 percent over the call money rate of 4.8 percent. What will his total dollar return be on this investment if he sells his shares today at a price per share of $73.40? Ignore dividends.

• A) -$548.60
• B) -$539.67
• C) -$534.95
• D) -$574.87
• E) -$591.19

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Definitions:

Service Business

A type of business that provides intangible products or services to its customers rather than selling physical goods.

Factory Overhead Rate

A calculation used in manufacturing to allocate indirect costs, such as utilities and rent, to individual units of production.

Processing Departments

Divisions or areas within a factory where specific stages of production are completed, often part of a cost accounting system to track expenses and efficiency.

Job Order Costing

An accounting methodology used to allocate costs to specific jobs or batches, allowing for detailed cost tracking of particular projects.