Steven purchased 1000 shares of a certain stock for $25,700 (including commissions). He sold the shares 2 years later and received $33,400 after deducting commissions. Find the effective annual rate of return on his investment over the 2-year period. (Round your answer to two decimal places.)

Steven purchased 1000 shares of a certain stock for $25,700 (including commissions). He sold the shares 2 years later and received $33,400 after deducting commissions. Find the effective annual rate of return on his investment over the 2-year period. (Round your answer to two decimal places.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section: Chapter Questions

Problem 2P

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Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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