Question

How is the Rate of Return on an investment determined?

a.

By multiplying the annual income with the price at the end

b.

By subtracting the price at the beginning from the price at the end

c.

By dividing the annual income by the price at the beginning

d.

By using a complex formula involving market trends

Answer: (c).By dividing the annual income by the price at the beginning Explanation:The formula for determining the Rate of Return on an investment: Rate of Return = [Annual income + (Price at end - Price at Beginning)) / Price at Beginning.

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Q. How is the Rate of Return on an investment determined?

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