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9 January, 17:07

Juan purchased shares in ABC company for $5,000 three years ago. During these three years he received $600 in dividends. He just sold the stock for $4,300. What was his total return on this investment?

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  1. 9 January, 17:18
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    B) - 2%

    Explanation:

    The total return on an investment is calculated by,

    Total Return = Capital gains : Initial Investment x 100

    First we will have to calculate capital gains of his investment,

    He got 600 in dividends and 4,300 after selling the stock against the initial investment of $5,000.

    So capital gains,

    = 600 + 4,300 - 5,000

    = - 100

    Total Return would be,

    = - 100 / 5,000 x 100

    = - 2% is the total return on his investment.
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