Answer:
Average return for one year is 9.6 %
Explanation:
Computation of average return
Lets assume the cost of each share to be 100
Opening Growth Closing
Value % Value
Company A 50 % at 100 5,000 8 % 5,400
Company B 30 % at 100 3,000 12 % 3,360
Company C 20 % at 100 <u>2,000</u> 10 % <u>2,200</u>
Total values 10,000 10,960
Increase in value over base divided by base equals the average return
10,960 - 10,000 = 960/ 10000 = 9.6 % average return
