Lucia bought 800 share of a company's stock for $7.94/share. She pays a broker a commission of $16 to buy and sell stock. After one year, she sold all her shares, which were worth $8.75/share at that time. What was her rate of return?

A. 8.8%

B. 9.3%

C. 9.7%

D. 10.2%

Question

Paola Hester

Mathematics

22 November, 03:22

Lucia bought 800 share of a company's stock for $7.94/share. She pays a broker a commission of $16 to buy and sell stock. After one year, she sold all her shares, which were worth $8.75/share at that time. What was her rate of return?

A. 8.8%

B. 9.3%

C. 9.7%

D. 10.2%

+2

Answers (1)

Know the Answer?

Ireland Schaefer · Answer 1

A: How much did it cost to purchase the stock?

(# of shares x cost per share)

(add cost of commission)

800 x 7.94 = 6352

6352 + 16 = 6368

B: Find the net gain or loss.

(# of shares x selling price per share)

(commission - selling price)

(sale of shares - total cost)

800 x 8.75 = 7000

7000 - 16 = 6984

6984 - 6368 = 616

C: Rate of Return (net gain/total cost)

616/6368

= 0.0967 = 9.7%

Lucia bought 800 share of a company's stock for $7.94/share. She pays a broker a commission of $16 to buy and sell stock. After one year, she sold all her shares, which were worth $8.75/share at that time. What was her rate of return?A. 8.8%B. 9.3%C. 9.7%D. 10.2%

Lucia bought 800 share of a company's stock for $7.94/share. She pays a broker a commission of $16 to buy and sell stock. After one year, she sold all her shares, which were worth $8.75/share at that time. What was her rate of return?

A. 8.8%

B. 9.3%

C. 9.7%

D. 10.2%