You purchase 100 shares of XTS for $50.00/sh. and after a year the price rises t

Question

You purchase 100 shares of XTS for $50.00/sh. and after a year the price rises to $60.000/sh. What will the percentage return on your cash investment if you bought the stock on Margin and the margin requirement was: a) 25% b) 50% c) 75% Disregard time value of money, commissions, dividends and interest expense. Show all calculations. An investor buys shares in a mutual fund for $20.00/sh. At the end of the Year the fund distributed a $0.58 dividend and after the distribution the net asset value (NAV) goes to 24.31. What is the investor's percent return on their investment? Disregard time value of money and any Load charges. Show all calculations.

Explanation / Answer

problem 1

cost of 100 share=$5000

selling price=$6000

(a)money invested=0.25*5000=$1250

profit=$1000

percentage return=80 %

(b)

money invested=0.5*5000=2500

profit=$1000

percentage return=40%

(c)

money invested=0.75*5000=3750

profit=$1000

percentage return=26.67 %

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