What is the formula to calculate an investor's periodic rate of return?Question 16Answera.(P0 - P1 - RGP)/P0b.(RGP - P1 + P0)/P0c.(P1 - P0 - RGP)/P0
Question
What is the formula to calculate an investor's periodic rate of return?Question 16Answera.(P0 - P1 - RGP)/P0b.(RGP - P1 + P0)/P0c.(P1 - P0 - RGP)/P0
Solution
The formula to calculate an investor's periodic rate of return is (P1 - P0 + RGP)/P0 where:
- P1 is the ending price of the investment
- P0 is the beginning price of the investment
- RGP is the gross profit received from the investment during the period
So, the correct answer is c. (P1 - P0 - RGP)/P0.
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