An Investor Puts Up $5,000 but Borrows an Equal Amount

question 70

Multiple Choice

An investor puts up $5,000 but borrows an equal amount of money from his broker to double the amount invested to $10,000. The broker charges 7% on the loan. The stock was originally purchased at $25 per share, and in 1 year the investor sells the stock for $28. The investor's rate of return was ________.

• A) 17%
• B) 12%
• C) 14%
• D) 19%

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Definitions:

Dying

The process of coming to the end of life, resulting in the cessation of all biological functions that sustain a living organism.

Coping

Coping refers to the strategies and mechanisms that individuals employ to manage stress, challenges, or adversity in order to maintain psychological well-being.

Loss

The experience of having something valuable taken away or disappearing, leading to emotional grief or sadness.

Fiscal Policy

Government adjustments to its spending levels and tax rates to monitor and influence a nation's economy.