an-investor-buys-a-stock-for-50-and-by-the-end-of-the-year-its-price-increases-t

Question

An investor buys a stock for $50, and by the end of the year, its price increases to $70. How does this change affect the Economic Return from Investing?

Accepted Answer

It results in a capital gain of $20, increasing the numerator of the ratio.

Answer

It has no effect on the Economic Return from Investing.

Answer

It results in a capital loss of $20, decreasing the numerator of the ratio.

Answer

It only affects the denominator of the ratio.

An investor buys a stock for \$50, and by the end of the year, its price increases to \$70. How does this change affect the Economic Return from Investing?