Final answer:
The total return on the investment is calculated by subtracting the initial investment from the final amount received, then dividing this by initial investment and multiplying by 100%. The total return on the xyz stock is 300%.
Step-by-step explanation:
To calculate the total return on the investment in xyz stock, we need to determine the initial investment and the final amount received from selling the stock.
Initial investment for 200 shares at $25 per share is:
200 shares × $25/share = $5,000
The stock was later sold for a total of $20,000.
Total return is calculated as:
((Final Amount - Initial Investment) ÷ Initial Investment) × 100%
Inserting our amounts into this formula, we get:
(($20,000 - $5,000) ÷ $5,000) × 100% = ($15,000 ÷ $5,000) × 100%
Which simplifies to:
3 × 100% = 300%
Therefore, the total return on the investment is 300%, which is option d).