Question 6
1 pts
At the start of the year, you opened an online E*Trade account and decided to invest $5,000 in the
stock market. You followed the market closely and made trades every few days, buying and selling
various stocks a total of 100 times throughout the year. Each time you transacted (i.e., 100 times),
E*Trade charged you a $6 fee/commission. The S&P 500 finished up 21% this year, and your picks
performed as well as the market--you were also up 21%, before transaction fees. What was your
return this year after taking fees into account? Ignore capital gains taxes and assume for simplicity
that all commissions were paid at the end of the year.
9%
13%
16%
20%
23%
27%