You paid cash for $1,500 worth of stock a year ago. Today the portfolio is worth $2,380.
a. What rate of return did you earn on the investment?
b. Now suppose that you bought the same stock but bought it on margin. The initial margin requirement was 60%. (Recalculate your rate of return, ignoring any interest due).
c. Recalculate the rates of return for a cash purchase in the event that the stock is worth $875 today. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
d. Recalculate the rates of return for a margin purchase in the event that the stock is worth $875 today. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)