What Would Be the Annual Compound Return on a Stock

question 70

Multiple Choice

What would be the annual compound return on a stock purchased at $20 per share, held for 5 years, and sold for $32.22? Ignore brokerage commissions and tax implications and assume the stock paid no dividends during the holding period. Round to the nearest whole percent if necessary.

• A) 3%
• B) 10%
• C) 15%
• D) 16%

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Definitions:

Unilateral Contract

A contract in which only one party makes a promise or obligation in exchange for an act by the other party.

Invalid Verbal Contract

An oral agreement that lacks enforceability by law, often due to the absence of required elements for a valid contract or due to specific types of agreements that require written form.

Assurance

A formal declaration intended to give confidence or guarantee of certain outcomes or conditions.

Promise

An assurance that one will or will not do something in the future.