USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 16

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Shares of RossCorp stock are selling for $45 per share. Brokerage commissions are 2 percent for purchases and 2 percent for sales. The interest rate on margin debt is 6.25 percent per year. The maintenance margin is 30 percent.
-Refer to Exhibit 3.7. At the end of one year, shares of RossCorp stock are selling for $35 per share and the company paid dividends of $0.85 per share. Assuming that you paid the full cost of the purchase, what is your rate of return if you sell RossCorp stock?

• A) -33.05 percent
• B) -23.42 percent
• C) 23.42 percent
• D) 33.05 percent
• E) -25.35 percent

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Definitions:

Physiological Patterns

Regular and predictable ways in which the body functions or responds to stimuli, often related to health and disease.

Innate

Refers to qualities, abilities, or knowledge that are present from birth, not acquired through experience or learning.

Evolutionary Reason

An explanation for a trait, behavior, or phenomenon that is based on the principles of natural selection and adaptation.

Amygdala

A part of the brain's limbic system involved in emotion regulation, especially fear and pleasure responses.