An investor tracks 5 stocks. Four of them have an average return of 8%. If the overall average return is 9%, what was the return on the fifth stock?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 13%.
Total return of 4 stocks = 4 × 8% = 32%
Total return of 5 stocks = 5 × 9% = 45%
Return of 5th stock = 45% − 32% = 13%