An Investor Borrows 20% of the Funds to Buy a Stock

Multiple Choice

An investor borrows 20% of the funds to buy a stock at a price of $100. If the price falls to 50, his or her effective rate of return is

A) -20% + borrowing costs.
B) -50% + borrowing costs.
C) -62.5% + borrowing costs.
D) -66.6% + borrowing costs.