A private post-secondary corporation had a 1-year low stock price of $18.69 and a high of $40.47. Assuming that you bought it at the lowest price and sold it at its highest price, what is the simple annual rate of return on your stock purchase?

Question

Quizplus · Accepted Answer

To calculate the simple annual rate of return, we can use the following formula:

Rate of return = (Sale Price - Purchase Price) / Purchase Price

In this case, the purchase price is $18.69 and the sale price is $40.47. So:

Rate of return = ($40.47 - $18.69) / $18.69

Rate of return = $21.78 / $18.69

Rate of return = 1.166

To convert this decimal to a percentage, we multiply by 100:

Rate of return = 116.6%

Therefore, the simple annual rate of return on the stock purchase is 116.533%, which is closest to option D (116.533%).

A Private Post-Secondary Corporation Had a 1-Year Low Stock Price