Question

Nano-Motors Corp. has stock outstanding which sells for $10 per share. Macro-Motors Inc. shares cost $50 each. Neither stock pays dividends at present.
a. An investor buys 100 shares of Nano-Motors. A year later the stock sells for $15. Calculate the total return in dollar terms and in percentage terms.
b. Another investor buys 100 shares of Macro-Motors stock. A year later the stock has risen to $56. Calculate the total return in dollar terms and in percentage terms.
c. Why is it difficult to say which investor had a better year?


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  • CreatedMarch 26, 2015
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