Holding Period Return = (Final Price - Initial Price)/Initial Price = ($70 - $40)/$40 = 75%
Annualized compound return calculation needs use of basic time value of money function, which is:
FV = PV * (1 + r)n
$70 = $40 * (1 + r)8
1.75 = (1 + r)8
(1 + r) = 1.0725
r = 7.25%
You sold a stock for $70 that you purchased fourteen years earlier for $40, What was...
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