The call money rate is 6.5 percent, and you pay a 1.3 percent spread above that. You buy 1,500 shares at a price of $56, and an initial margin of 50 percent. You close the position one year later at a stock price of $61. What was your return?

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The total cost of buying the shares is 1,500 * $56 = $84,000. With an initial margin of 50%, you borrow $42,000. The interest on this loan for one year at a rate of 6.5% + 1.3% = 7.8% is $42,000 * 7.8% = $3,276. When you sell the shares at $61, you receive 1,500 * $61 = $91,500. The return on the investment is calculated as (Ending Value - Initial Value - Interest Paid) / Initial Value. Plugging in the numbers: ($91,500 - $84,000 - $3,276) / $42,000 = 0.1006, or 10.06%.

The Call Money Rate Is 6