Question

You initially purchase stock A for $300 per share and later sell it for $350. Calculate the ROI in $ and in %.

a) $50 gain, 16.67%
b) $350 gain, 116.67%
c) $300 gain, 100%
d) $50 gain, 15%

Answer 1

The correct calculation is a $50 gain per share, with the ROI in percentage being 16.67%, making the correct answer option a) $50 gain, 16.67%.

Step-by-step explanation:

To calculate the Return on Investment (ROI) you must consider the initial purchase price of the stock, the selling price, and the difference between the two, which represents the gain or profit. For stock A, purchased at $300 per share and sold for $350 per share, the profit per share is $50. To find the ROI in percentage, divide this profit by the initial purchase price and multiply by 100:

ROI (%) = (Profit / Initial Purchase Price) x 100 = ($50 / $300) x 100 = 16.67%

Therefore, the correct answer is a) $50 gain, 16.67%.