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Oliga [24]
3 years ago
13

You have a ​$102000 portfolio comprising 16 stocks. You trade each stock five times this year and each time you​ trade, you pay

about ​$30 in commissions and spread. You have no special​ knowledge, so you earn only the average market return of 14​% on your investments. How much lower will your total return be because of your​ trades?
Business
1 answer:
Ilia_Sergeevich [38]3 years ago
8 0

Answer:

My total return is lower 1.05% because of my trades

Explanation:

The total commission and spread I have to pay for trading five times in year is $150 (= $30 x 5)

The total return on the portfolio of $102,000 is $14,280 =(14%*$102,000)

So the total commission and spread / the total return = $150/$14.280 = 1.05%

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