Marian bought $3,000 in stock and held it for one year. She paid $50 per share in cash, received no dividends, and sold the shares for $55 per share one year later. Ignoring transaction costs, what was her return on investment?

Question

Quizplus · Accepted Answer

Marian bought shares at $50 each, so she bought 60 shares ($3,000 / $50). She sold them for $55 each, totaling $3,300 (60 * $55). Her profit is $300 ($3,300 - $3,000). The return on investment is the profit divided by the initial investment: $300 / $3,000 = 0.10, or 10%.

Marian Bought $3,000 in Stock and Held It for One