Question

Three months ago, you purchased a stock for $67.16. The stock is currently priced at $72.62. What is the EAR on your investment? A. 32.52% B. 8.13% C. 29.81% D.36.70% E. 40.04%

Answer 1

Ans A. 32.52%

Po =	Purchase Price
P1 =	Sale Price
Total Return on Shares =	(Dividend + (P1 - P0)) * No of Shares
	(0 + 72.62 - 67.16) * 1
	5.46
Return on Shares in % =	Return on Share / P0 * 100
	5.46 / 67.16 * 100
	8.13%
EAR =	Return on share / 3 * 12
	8.13% / 3* 12
	32.52%