Assume that you purchase 100 shares of a stock today at $56.50. A year from now the stock price will rise to $100. To realize the gain, you sell all of the shares. What is the percentage rate of return, assuming the stock will not pay any dividends:

Question

Quizplus · Accepted Answer

To calculate the percentage rate of return, we use the formula:

Percentage Rate of Return = ((Sale Price - Purchase Price) / Purchase Price) * 100

In this case, the purchase price is $56.50 and the sale price is $100.

Percentage Rate of Return = ((100 - 56.50) / 56.50) * 100 = 76.99%

Therefore, the best choice is A) 76.99% as it matches the calculated percentage rate of return.

Assume That You Purchase 100 Shares of a Stock Today