You purchased GameStock at $10 per share and exactly one year later you sold it fo $95. What is the effective annual % rate of return after one year? What is the effective rate % per quarter? What is the effective rate % per month?

You purchased GameStock at $10 per share and exactly one year later you sold it fo $95. What is the effective annual % rate of return after one year? What is the effective rate % per quarter? What is the effective rate % per month?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 16P

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Question

You purchased GameStock at $10 per share and exactly one year later you sold it fo $95.

What is the effective annual % rate of return after one year?
What is the effective rate % per quarter?
What is the effective rate % per month?

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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