I think there might be a mistake in the curriculum notes, but wanted to check if anyone else had input. How is the return to buying a stock on margin calculated? Are commissions subtracted from the numerator or denominator?

the return on margin is just the return on the stock times the “leverage multiple” (my own term, not sure what it’s actually called)… so, if the margin is 10%, the leverage multiple is the reciprical of 10% = 10. so, if the stock return is 4%, your actual return is 40%… And if the margin is 25%, the leverage multiple is 4… meaning your actual return is 16%… so on and so forth…