Answer:
23.77%
Explanation:
Given that,
Purchased a stock eight months ago for $36 a share
Today, you sold that stock for $41.50 a share
Return for 8 months:
= (selling price today ÷ Purchasing price)
= ($41.50 ÷ $36) - 1
= 15.28%
Annualized rate of return:
= (1 + Return for 8 months) ^(12 ÷ 8) - 1
= (1 + 15.28%)^(12 ÷ 8) - 1
= 23.77%
Hence, the annualized rate of return is 23.77%.
Answer:
Capital Gain on stock = Selling price of stock - Purchase price
= $ 41.5 - $ 36
= $ 5.5
% rate of return = (Capital gain on stock / Purchase price of stock) * 100
= ( $ 5.5 / $ 36 ) * 100
=0.1527 * 100 = 15.27%
Now, the holding period was 8 months. This implies that 15.27% is rate of return for 8 months.
Hence, annualized rate of return = ( 15.27 / 8 ) * 12
= 1.90875 * 12
= 22.905 %
Explanation:
Refer to the answer.
