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An investor purchased 50 shares ofstock in a company for $40 pershare. One year later, the investorsold all the shares for $2,200. Whatis the investor's rate of return?A. 9.1%B. -9.1%C. -10.0%D. 10.0%

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Respuesta :

Investor purchased 50 shares of stock in a company for $40.

So, the total initial amount he invested is

[tex]50\cdot40=2000[/tex]

Then the rate of return is:

[tex]\begin{gathered} \text{rate of return=}\frac{shares\text{ sold price-initial amount invested}}{\text{ initial amount invested}}\cdot100 \\ =\frac{2200-2000}{2000}\cdot100 \\ =\frac{200}{2000}\cdot100 \\ =10 \end{gathered}[/tex]

So, the requied rate of return is 10.0%.

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