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8 January, 16:49

Imagine you bought 100 shares of stock in XYZ, Inc. today at $1 each, and sold all 100 shares for $1.50 each a year later. You also earned $25 in dividends over the period, and paid $5 to make the trade. What is your Return on Investment (ROI) ?

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Answers (2)
  1. 8 January, 17:14
    0
    Answer: you win $70 in this transaction.

    Explanation: Initially you bought 100 shares at $1 each, so as for now, we have the total amount of 100*-$1 = - $100.

    After, you sell all of them by $1.5 each, so now you have:

    100*$1.5 = $150

    Here you also win $25, and paid $5, so you lose $5.

    Now, the things you paid are the initial $100 and the $5, so the total amount that you lose is $105.

    The amount that you win is $150 and $25, a total of $175.

    The difference is:

    Profit = $175 - $105 = $70

    So you win $70 in this transaction.
  2. 8 January, 20:47
    0
    ROI = Net Profit / Total Investment * 100

    Calculation of net profit = ($1.50 - $1 * 100 shares + $25) less expenses $5 = $70

    ROI = [$70 / 100 * $1] * 100

    = 70%
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