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    smartangel88's Avatar
    smartangel88 Posts: 6, Reputation: 1
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    #1

    Feb 12, 2008, 11:14 AM
    What is her return
    Leona purchased 1,200 shares of the Lakeview Mutual Fund at an offer price of $4.20 per
    share. She later sold the shares at a net asset value of $4.95 per share. During the time
    Leona owned the shares, Lakeview paid a dividend of $0.42 per share. What is her return
    on investment?
    A. 27.9% C. 10.7%
    B. 17.9% D. 3.6%

    I really need help with this question... don't know how to solve it
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Feb 12, 2008, 01:32 PM
    You need to be looking at what she actually put into the shares. i.e. her investment is anything she paid out. And then what she got back out of owning those shares. i.e. what was everything she got paid? In a way you can think of it just like you would revenues and expenses. You'd take everything you made, everything you spent, subtract the two and get net income. Same thing here. That's her "net" return.

    Any time you have a return on something, or a rate on something, you divide the first something by the second something. i.e. return on investment is the return (what they got net) divided by investment (what they put in).

    See what you can do with it.
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