EBK FOCUS ON PERSONAL FINANCE
6th Edition
ISBN: 9781260140965
Author: Kapoor
Publisher: MCGRAW HILL BOOK COMPANY
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Chapter 13, Problem 11P
Summary Introduction
To determine: Dollar amount of total return.
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A year ago, Kim Altman purchased 190 shares of BLK, Inc. for $27.00 on margin. At that time the margin requirement was 60 percent. If the interest rate on borrowed funds was 6 percent and she sold the stock for $35.50, what is the percentage return on the funds she invested in the stock? Round your answer to two decimal places.
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Tom had 300 shares of the XYZ Fund on January 1. The shares had a value of GHS23. During the year, he received GHS150 in dividends and GHS450 in capital gains distributions. He used the funds to purchase shares at an average price of GHS25 per share. By the end of the year, the shares were all up to GHS27. What is the percentage of his total return?
Two years ago, Lizzy Martinez, from Atlanta, GA, invested $1,000 by buying 125 shares (8$ per share NAV) in the Can't Lose Mutual Fund, an aggressive growth no-load mutual fund. Last year, she made two additional investments of $500 each (50 shares at $10 and 40 shares at $12.50). Lizzy reinvested all of her dividends. So far, the NAV for her investment has risen from $8 per share to $13.25.
Assuming that Lizzy has to pay income taxes on the difference between the sales price for the 60 shares and their cost, how much is the difference?
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EBK FOCUS ON PERSONAL FINANCE
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