You purchased HIH shares at a price of $30 per share. Its price was $20 after six months and the company declared bankruptcy at the end of the next six months. The realised return over the last year is

Question

Quizplus · Accepted Answer

The realized return is calculated as (Final Value - Initial Value) / Initial Value. Since the company declared bankruptcy, the final value of the shares is $0. Therefore, the realized return is ($0 - $30) / $30 = -1 or -100%.

You Purchased HIH Shares at a Price of $30 Per