I buy 100 shares of stock at $2 a share, with $100 of my own money. I borrow another $100 at 10 percent interest. The share price stays constant at $2. My rate of return is approximately:
A)2 percent.
B)0 percent.
C)−5 percent.
D)−10 percent.

Question

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The Answer of I buy 100 shares of stock at $2 a share, with $100 of my own money. I borrow another $100 at 10 percent interest. The share price stays constant at $2. My rate of return is approximately:
A)2 percent.
B)0 percent.
C)−5 percent.
D)−10 percent.

I Buy 100 Shares of Stock at $2 a Share