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27 November, 10:33

Suppose a stock sells for $1,200 and pays no dividends. At the end of one year, the stock's price decreases to $1,000. What is the dollar return on an investment in this stock? $200.00 - $0.17 - $200.00

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  1. 27 November, 13:29
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    ROI = - $200

    Explanation:

    Rate of return is also called return on investment. It measires the increase or decrease relative to initial cost of investment.

    For example if $500 was invested in a business and eventually it brings in a profit of $20 the return on the initial investment will be the $20 profit. If however there is a loss it will result in a negative return on investment.

    In this scenario the stock does not pay any dividends and initial cost was $1,200

    To get the return on investment

    ROI = Final investment amount - Initial investment amount

    ROI = 1,000 - 1,200

    ROI = - $200
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Home » Business » Suppose a stock sells for $1,200 and pays no dividends. At the end of one year, the stock's price decreases to $1,000. What is the dollar return on an investment in this stock? $200.00 - $0.17 - $200.00
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