contestada

Lucia bought 800 share of a company's stock for $7.94/share.She pays a broker a commission of $16 to buy and sell stock. After one year,she sold all her shares, which were worth $8.75/share at that time. What was her rate of return?

A. 8.8%
B. 9.3%
C.9.7%
D.10.2%

Respuesta :

roo777x
A: How much did it cost to purchase the stock?
(# of shares x cost per share)
(add cost of commission)
800 x 7.94 = 6352
6352 + 16 = 6368

B: Find the net gain or loss.
(# of shares x selling price per share)
(commission - selling price)
(sale of shares - total cost)
800 x 8.75 = 7000
7000 - 16 =6984
6984 - 6368 = 616

C: Rate of Return (net gain/total cost)
616/6368
= 0.0967 = 9.7%
ashishdwivedilVT

Lucia's rate of return was estimated to be 9.7% after a commission of $16 to buy and sell stock.

Cost price of 800 shares = 800*7.94 = $6352

Cost price of 800 shares after commission = $6352+$16=$6368

Selling price of 800 shares= 800*8.75 = $7000

Selling price of 800 shares after commission = $7000-$16 = $6984

What is the rate of return?

A rate of return (RoR) is the net gain or loss of an investment over a specified time period, expressed as a percentage of the investment's initial cost.

Rate of return

[tex]=\frac{SP-CP}{CP} *100\\\\=\frac{6984-6368}{6368} *100\\\\= 9.7%[/tex]

Therefore, Lucia's rate of return was estimated to be 9.7% after a commission of $16 to buy and sell stock.

to get more about the rate of return refer to:

https://brainly.com/question/24301559

Otras preguntas