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Richard purchased 500 shares of a company at £20 per share. The stock was bought on 60% margin. One month later, Richard had to pay interest on the amount borrowed at a rate of 1% per month. At that time, Richard received a dividend of £0.15 per share. Immediately after that he sold the shares at £24 per share. He paid commissions of £5 on the purchase and £5 on the sale of the stock. What was the rate of return on this investment for the one-month period?
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Richard purchased 500 shares of a company at £20 per share. The stock was bought on 60% margin. One
month later, Richard had to pay interest on the amount borrowed at a rate of 1% per month. At that time,
Richard received a dividend of £0.15 per share. Immediately after that he sold the shares at £24 per share.
He paid commissions of £5 on the purchase and £5 on the sale of the stock. What was the rate of return
on this investment for the one-month period?
A.) + 20.00%
B.) +25.00%
C.) +33.00%
D.) +33.75%
Answer ( 1 )
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