To calculate the investor’s total rate of return, we need to first determine the total cost of the investment and the total proceeds from the sale:

Total cost = 500 shares x €50/share = €25,000 Margin = €25,000/4 = €6,250 (the investor put up 25% of the total cost and borrowed the rest) Interest expense = €6,250 x 6% = €375 Commission = 500 shares x €0.02/share = €10 Total cost = €25,000 + €375 + €10 = €25,385

Total proceeds = 500 shares x €45/share = €22,500

Dividends = 500 shares x €2/share = €1,000

Total return = (proceeds + dividends - cost)/cost = (€22,500 + €1,000 - €25,385)/€25,385 = -0.0425 or -42.25%

Therefore, the closest answer is B. -42.25%.