Question

An investor purchased 100 shares of stock in a company for $12 per share. One year later, the investor sold all the shares for $1,300. What is the investor's rate of return?

Answer 1

Given:

An investor purchased 100 shares of stock in a company for $12 per share. One year later, the investor sold all the shares for $1,300.

Required:

What is the investor's rate of return?

Step-by-step explanation:

We know that

`\begin{gathered} \text{ Initial price}=100*12 \\ \text{ =1200 } \end{gathered}`
`\text{ Final price}=1300\text{ }`

Now, rate of return

`R=\frac{Final\text{ value-Initial value}}{Initial\text{ value}}`

So, percentage is

`\begin{gathered} R=(1300-1200)/(1200)*100 \\ R=(100)/(1200)*100 \\ R=8.33 \end{gathered}`

Answer:

Hence, above is the return of return.