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John bought 100 shares at $45 by cash. He sold the shares in 7 months at...

John bought 100 shares at $45 by cash. He sold the shares in 7 months at $49. Find the HPR

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Answer #1

Compute the initial value using the equation as shown below:

Initial value = Number of shares * Price per share

= 100 * $45

= $4,500

Hence, the initial value is $4,500.

Compute the ending value using the equation as shown below:

nitial value = Number of shares * Price per share

= 100 * $49

= $4,900

Hence, the initial value is $4,900.

Compute the HPR using the equation as shown below:

HPR = ( Income generated + ( Ending Value - Initial Value)) / Initial value

= ($0 + ( $4,900 - $4,500)) / $4,500

= 8.88888889%

Hence, HPR is 8.88888889%.

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