Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An investments rate of return (ROR), or return on investment (ROI), refers to the increase or decrease in the value of an investment relative to

An investments rate of return (ROR), or return on investment (ROI), refers to the increase or decrease in the value of an investment relative to its cost. This return can be expressed either in dollar terms or as a percentage of the cost of the investment.

Suppose a stock sells for $800 and pays no dividends. At the end of one year, the stocks price decreases to $700. What is the dollar return on investment in this stock?

-$100.00

$0.12

$100.00

Based on your understanding of investment returns, complete the following sentence:

If the amount to be received at the end of the investment period isgreater than the amount invested, the investment is said to have a positive return on investment.

You gave $770 to your cousin. As a token of gratitude, your cousin gave you $1,190 at the end of the year instead of $770. If you look at this as an investment, then your annual rate of return would be .

Which of the following investments generates a higher annual rate of return?

A $1,000 return on a $10,000 investment for 1 year

A $1,000 return on a $10,000 investment after 10 years

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Accumulation And Monetary Power

Authors: Daniel Woodley

1st Edition

0367338556, 978-0367338558

More Books

Students also viewed these Finance questions

Question

7. Set team as well as individual performance goals.

Answered: 1 week ago