Solving for Rates You Invested $5,000 in the Stock Market

question 1

Multiple Choice

Solving for Rates You invested $5,000 in the stock market one year ago. Today, the investment is valued at $4,500. What return did you earn? What return would you need to get next year to break even overall?

• A) -111.11%, +90%, respectively
• B) -90%, +111.11%, respectively
• C) -10%, +11.11%, respectively
• D) -11.11%, +10%, respectively

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Definitions:

Gold

A precious metal that serves as a form of investment, currency, and store of value, historically used to hedge against inflation and currency devaluation.

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its stock price, often expressed as a percentage.

Risk-Free Interest Rate

The theoretical return on an investment with no risk of financial loss, typically represented by the yield on government securities.

Futures Price

The predetermined price at which a futures contract is agreed upon to buy or sell an asset at a future date.