Question

Can someone help me determine the ROI?

Answer 1

@jim_thompson5910

Answer 2

go ahead

Answer 3

I know the equation is the final value - initial investment/initial investment

Answer 4

however when i calculated the initial investment for this assignment i got that it was 6694

Answer 5

now i am having complications calculating the final value bc it is not stated here

Answer 6

ok post the problem so I can have a look

Answer 7

I know that I have to use the compund interest formula

Answer 8

the principal value would be the 6694 but i am not sure how am i supposed to plug in the rest

Answer 9

and its a file though bc the students have to look for the information at a website called the nyse and i am doing research on the coca cola company @jim_thompson5910

Answer 10

a text file? or something like it?

Answer 11

i am not sure if this will help https://www.nyse.com/quote/XNYS:KO

Answer 12

take a look at it @jim_thompson5910

Answer 13

ok reading now

Answer 14

ok so you bought 200 shares in 1998 and sold them all in 2008

and you're trying to find the ROI, correct?

Answer 15

yes sir

Answer 16

assuming you bought the 200 shares at the closing price, you have the correct cost

$33.47*200=$6694

Answer 17

yup

Answer 18

now also assume you sell the 200 shares at the closing price in 2008

closing price per share = $30.93

30.93*200 = 6,186

Answer 19

is that roi?

Answer 20

\[\Large \text{ROI} = \frac{\text{Total Revenue} - \text{Total Cost}}{\text{Total Cost}}\]
\[\Large \text{ROI} = \frac{6186 - 6694}{6694}\]
\[\Large \text{ROI} = \frac{-508}{6694}\]
\[\Large \text{ROI} \approx -0.07588885569167\]
The negative ROI means that you lost money. So this is a bad investment. Of course, the decision to sell when the price per share in 2008 is lower than the price per share in 1998, is the reason why this is a bad decision.

Answer 21

Can you help me do the same for todays investment

Answer 22

notice how it says "High:$31.36"

so there is no way to get a positive ROI if you sell the shares in 2008

Answer 23

recall that the stock market sharply plunged in 2008, so selling stocks would have made a negative ROI on many stocks

Answer 24

that is true

Answer 25

June 22, 2015
Close:$40.48

Assume you sell the shares at the closing price

Answer 26

Revenue = (# of shares)*(price per share) = 200*40.48 = 8,096

Answer 27

what ROI do you get?

Answer 28

8096-6694/6694

Answer 29

Yep

\[\Large \text{ROI} = \frac{\text{Total Revenue} - \text{Total Cost}}{\text{Total Cost}}\]
\[\Large \text{ROI} = \frac{8096 - 6694}{6694}\]
\[\Large \text{ROI} = ???\]

Answer 30

0.2094412907

Answer 31

correct, so you made some money if you sold in 2015 (in contrast to 2008 where you lost money)

Answer 32

thank you so much jim

Answer 33

no problem