Question

Unit 4 What is the rate of return when 20 shares of Stock A, purchased for $20/share, are sold for $490? The commission on the sale is $6. Rate of Return = [?] % Give your answer as a percent rounded to the nearest tenth.

Answer 1

21%

Explanation:

You want the rate of return on 20 shares of stock bought for $20 per share and sold for $490 with a commission on the sale of $6.

Rate of return

The rate of return is the percentage change between the sale proceeds and the cost of the stock.

rate of return = (proceeds/cost -1) × 100%

= ((490 -6)/(20·20) -1) × 100% = 21%

The rate of return is 21%.

<95141404393>