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29 June, 12:26

Imagine you purchased 75 shares of this stock on Day 1 and sold all of those shares on Day 3. What is the return on your investment? Show your work.

Day 1

75 shares x price = 13,179

Day 3

75 shares x price = 13,293

Return on Investment = (Final value - Initial value) / Initial value

If you had sold all of the stock on Day 5 instead of Day 3, what is the difference between the return on your investment? Show your work.

Day 1

75 shares x price = 13,179

Day 5

75 shares x price = 13,177.5

Return on Investment = (Final value - Initial value) / Initial value

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Answers (1)
  1. 29 June, 13:18
    0
    Day 1: 75 shares x price = 13,179

    price = 13,179 / 75 shares = 175.72 price per share

    Day 3 : 75 shares x price = 13,293

    price = 13,293 / 75 shares = 177.24 price per share

    Return on Investment = (Final value - Initial value) / Initial value

    ROI = (13,293 - 13,179) / 13,179 = 0.00865

    0.00865 x 100% = 0.87%

    If share is sold in Day 5 instead of Day 3.

    Day 5 : 75 shares x price = 13,177.5

    price = 13,177.50 / 75 shares = 175.70 per share

    Return on Investment = (Final value - Initial value) / Initial value

    ROI = (13,177.50 - 13,179) / 13,179 = - 0.000113

    -0.000113 x 100% = - 0.011%

    If I had sold my shares in Day 3, I would have gained positive ROI because price per share increased.

    If I had sold my shares in Day 5, I would have lost a bit because price per share decreased resulting to a negative ROI
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