Question

If you buy a stock for $100, receive a $2 dividend and then sell the stock for $90, what is the total return from your investment (in percentage terms)?

Answer 1

-8%

Step-by-step explanation:

For computing the total return from your investment, first we have to determine the return from investment which is shown below:

Return on investment = Total inflow - total outflow

where,

Total inflow = $90 + $2 = $92

And, the total outflow = $100

So, Return on investment would be -$8

Now the Return on investment in percentage would be

= Return on investment ÷ investment × 100

= - $8 ÷ $100 × 100

= - 8%