Suppose that you purchased a growth stock paying no dividend six months ago at $30.85 per share and sold the stock at $43.57 yesterday. What was your annualized return?
A) 10.28%
B) 49.57%
C) 73.12%
D) 99.46%
E) 41.23%

Question

Quizplus · Accepted Answer

The return over six months is calculated as (43.57 - 30.85) / 30.85 = 0.4112 or 41.12%. To annualize this, we use the formula (1 + 0.4112)^(12/6) - 1 = 0.9946 or 99.46%.

Suppose That You Purchased a Growth Stock Paying No Dividend