Question

Foreign financial markets A US investor purchased stock in a Canadian company on January 15, 2019...

Foreign financial markets

A US investor purchased stock in a Canadian company on January 15, 2019 for C$107.85. The investor sold the stock on March 22 for C$112.15. What is the investor’s percentage return on the investment in Canadian dollars?

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Answer #1

Solution :

The formula for calculating the investor’s percentage return on the investment is

= [ ( Sale price - Purchase Price ) / Purchase Price ]

As per the information given in the question

Sale price of the stock = C$ 112.15 ; Purchase price of the stock = C$ 107.85

Applying the above values in the formula we have

=[ ( 112.15 - 107.85 ) / 107.85 ]

= 0.0399

= 3.99 % ( when rounded off to two decimal places )

= 4 % ( when rounded off to the nearest whole number )

Thus the investor’s percentage return on the investment in Canadian dollars = 3.99 % = 4 %

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