Question

An investor purchased 50 shares of

stock in a company for $1000. One
year later, the investor sold all 50
shares for $950. What is the
investor's rate of return?
A. -5.0%
B. 5.0%
C.-5.3%
D. 5.3%

Answer 1

The investor's rate of return is -5.0%.

Step-by-step explanation:

To calculate the investor's rate of return, we need to find the percentage change in the value of the investment. The investor purchased 50 shares of stock for $1000 and sold them for $950. The percentage change can be calculated using the formula:

Rate of return = ((selling price - purchase price) / purchase price) x 100%

Substituting the values, we get:

Rate of return = (($950 - $1000) / $1000) x 100%

Rate of return = (-$50 / $1000) x 100%

Rate of return = -5.0%