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An Investor Puts Up $5,000 but Borrows an Equal Amount

Question 62

Multiple Choice

An investor puts up $5,000 but borrows an equal amount of money from his broker to double the amount invested to $10,000. The broker charges 7% on the loan. The stock was originally purchased at $25 per share, and in 1 year the investor sells the stock for $28. The investor's rate of return was ________.


A) 17%
B) 12%
C) 14%
D) 19%

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