You Bought a Stock for $20 and Sold It for $59.72

question 19

Essay

You bought a stock for $20 and sold it for $59.72 after six years. What was the annual rate of return?

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Definitions:

Coupon Rate

The annual interest rate paid on a bond, expressed as a percentage of the bond's face value, and paid to bondholders at specified intervals until maturity.

Coupon Bond

A bond that entitles the holder to a fixed interest payment, or coupon, periodically until the bond matures.

Interest-Rate Risk

The potential for investment losses due to changes in interest rates, affecting the value of interest-bearing assets like bonds.

Yield To Maturity

The total return expected on a bond if the bond is held until its maturity date.