An investor purchased an asset for $1675.This investment is worth $1742 after three months.What is the simple annualised return for the investment (simple annual return)?

Question

Quizplus · Accepted Answer

Rearranging equation 1.1,page 11,the three-month return is equal to (1742 - 1675)/1675 = 0.04.The return for the three-month period is 4%.Hence,the simple annualised return on the investment is 0.04 × 4 = 0.16 or 16%.

An Investor Purchased an Asset for $1675