单选题 Mark Ritchie purchased, on margin, 200 shares of TMX Corp. stock at a price of $ 35 per share. The margin requirement was 50%. The stock price has increased to $42 per share. What is Ritchie's return on investment before commissions and interest if he decides to sell his TMX holdings now?

A、

A. 40%.
B、

B. 10%.
C、

C. 20%.

【正确答案】 A

【答案解析】200 shares×$ 35=$ 7000 initial market value $ 7000×0.50=$ 3500 cash payment and $ 3500 borrowed. The new market value of the stock after price increase is (200×$42)=$ 8400. If Ritchie sold his holdings he would have $ 4900 ($ 8400-$ 3500) left after the loan was paid. So Ritchie's return on his original $ 3500 investment is: $4900/3500-1=1.4-1.0=0.40=40%.