On january 20,2014 rocco bought on margin 200 shares of Balboa Corp. for $60.00 a share. Balboa pays an annual dividend of $1.50 a share. The margin requirement is 60% with an interest rate of 7% on borrowed funds. Please ignore trading commissions. The price of Balboa stock reached $67.00 on January 20, 2015, and Rocco sold all shares at that price
Note: assume that Balboa made one annual dividend payment of $1.50 per share on the last day of the holding period, and also paid all interest due on margin loans on the date of sale. commissions affect both the cost of ivnesting and the investment proceeds. the margin requirement is computed based on investment value. please also ignore taxes (all computations are to be made on a pretax basis)
a) what was Rocco's total net return (in dollars)?
b) what was Rocco's net rate of return on investment?