Assume Joe invests a total of $10,000 in a company - $5,000 of which is his own money and $5,000 which he borrowed at a 10% interest rate. If the company's stock value increases by 20% in one year at which time Joe sells his shares of the stock, what is Joe's rate of return on his investment?
a. 10%
b. 15%
c. 20%
d. 30%
d
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The price paid to purchase land
A) has no relation to cost because it did not cost anything to produce the land. B) rarely has any relation to cost because it has usually been determined by competitive bidding. C) usually depends on the cost to the seller of letting the purchaser have the land. D) would more accurately reflect the social value of the land if the price were zero.
If the production of wheat were subsidized by government,
A) the demand for wheat would increase. B) the supply of wheat would increase. C) both A & B would occur. D) none of the above would occur.
The number of units of one good that trade for one unit of alternative goods can be determined most easily when
A) there is one unit of account. B) the goods all weigh about the same. C) the goods are all new. D) the goods are actively traded through barter.
If Stephanie buys a laptop for $700 and the maximum she would have paid was $1,000, which of the following is true?
a. Stephanie received consumer surplus of $1,000. b. Stephanie received producer surplus of $700. c. Stephanie received a consumer surplus of $700. d. Stephanie received a consumer surplus of $300.