Greg purchased stock in Bear Stearns and Co. at a price of $88 per share one year ago. The

company was acquired by JP Morgan at a price of $11 per share. What is Gregʹs return on his

investment?

A) - 87.50%

B) - 113.75%

C) - 100.62%

D) - 96.25%

A) - 87.50%

Explanation:

The computation of the return on the investment is shown below:

= (Acquired price by JB Morgon - purchase price per share) : (purchase price per share)

= ($11 per share - $88 per share) : (88 per share)

= - ($77 per share) : (88 per share)

= - 87.50%

We simply take the difference of the price and then divide it with the purchase price per share so that the correct percentage can come.