Question

Lucia bought 800 shares of a company's stock for $7.94/share. she pays a broker a commission of $16 to buy and sell stock. After one year , she sold all her shares , which were worth $8.75/ share at the time .

what was her rate of return ?

A. 8.8
B. 9.3
C. 9.7
D. 10.2

Answer 1

9.7 is your answer for sure

Answer 2

To find the answer you will divide the amount of money she gained by selling the stock at a higher price by the cost of the stock (including fees paid).

$7.94 x 800= 6352
6352 + 32 (16 x 2 for buying and selling the stock )
$6384 cost

$8.75 x 800= $7000 for selling the stock

7000 - 6384 = $616 gain

$616/ $6352 = 0.097 or about 9.7 %

The answer is C.