show me how to calculate percentage return on the security if the payoff to the security in one year is $1000 and the security costs is $1500 today?
1000/1500 = .666.. = 66.67%
WOW !
To calculate the percentage return on a security, you need to use the formula:
Percentage Return = (Payoff - Initial Cost) / Initial Cost * 100
In this case, the payoff to the security in one year is $1000, and the security cost today is $1500.
To calculate the percentage return, plug in these values into the formula:
Percentage Return = (1000 - 1500) / 1500 * 100
Simplifying the equation, we get:
Percentage Return = -500 / 1500 * 100
Now, calculate the result:
Percentage Return = -33.33%
Therefore, the percentage return on the security is -33.33%. This negative value indicates a loss of 33.33% on the investment.