Suppose you bought Apple stock in January 2008 . If you...

Name: Problem 31, Chapter 5: Finite Mathematics and Applied Calculus
Uploaded: 2021-11-30T16:04:27-08:00
Duration: 1 min 33 s
Channel: Carson Merrill
Description: Suppose you bought Apple stock in January 2008 . If you later sold at one of the marked dates on the chart, which of those dates would have given you the largest annual return (on a simple interest basis), and what would that return have been?

Suppose you bought Apple stock in January 2008 . If you later sold at one of the marked dates on the chart, which of those dates would have given you the largest annual return (on a simple interest basis), and what would that return have been?

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Key Concepts

Simple Interest

Simple interest refers to a method of calculating returns on an investment by applying a fixed interest rate to the original principal over time without compounding. It is a straightforward way to determine the profit earned over a period of time by multiplying the principal, rate, and time period.

Annualized Return

Annualized return involves converting the overall return from an investment made over a period into an equivalent yearly rate. This conversion allows investors to compare the performance of different investments or time periods on a consistent, per-year basis, even if the investment period was not exactly one year.

Holding Period Return

Holding period return is the total return received from an investment over the entire period it was held, including both price appreciation and any income received. When this return is expressed on an annual basis, it helps investors understand how well the investment performed each year on average, regardless of the actual investment duration.

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