Question

Question 2 (1 point)

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A year ago, Rebecca purchased 100 shares of Havad stock for $20 per share.
Yesterday, she placed a limit order to sell her stock at a price of $33 per share before
the market opened. The stock's price opened at $23 and slowly increased to $26 in
the middle of the day, before declining to $22 by the end of the day. The stock did
not pay any dividends over the period in which Rebecca held it. Given Rebecca's
initial investment of $ 20 per share, her return is

Answer 1

Her return is
`R = 0.10`

Explanation:

From the question we are told that

The number of shares purchased is
`n = 100 \ shares`

The cost price of each share is
`x = \$ 20`

The limit order is
`y = \$ 33`

The first market price for each share is
`k = \$ 23`

The second market price for each share is
`u = \$ 26`

The third market price for each share is
`w = \$ 22`

Generally the limit order would not be executed given that it is higher than the market opening and closing price.

Considering Rebecca's initial investment of $ 20 per share, her return is mathematically evaluated as

`R = (w + d - x)/(x)`

Here d stands for the dividend but since we are told that the stock did not pay any dividend

`R = (22 + 0 - 20)/(20)`

`R = 0.10`