An investor bought a stock for $18 (at t = 0) and one year later it paid a $2 dividend (at t = 1). Just after the dividend was paid, the stock price was $19 (at t = 1). Inflation over the past year (from t = 0 to t = 1) was 8% pa, given as an effective annual rate. Which of the following statements is NOT correct? All answer options are rounded to 6 decimal places. The stock investment produced a: Question 3 Select one: a. Nominal capital return of 5.555556% pa. b. Nominal total return of 16.666667% pa. c. Real capital return of 14% pa. d. Real income return of 10.288066% pa. e. Real total return of 8.024692% pa.
An investor bought a stock for $18 (at t = 0) and one year later it paid a $2 dividend (at t = 1). Just after the dividend was paid, the stock price was $19 (at t = 1). Inflation over the past year (from t = 0 to t = 1) was 8% pa, given as an effective annual rate. Which of the following statements is NOT correct? All answer options are rounded to 6 decimal places. The stock investment produced a: Question 3 Select one: a. Nominal capital return of 5.555556% pa. b. Nominal total return of 16.666667% pa. c. Real capital return of 14% pa. d. Real income return of 10.288066% pa. e. Real total return of 8.024692% pa.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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An investor bought a stock for $18 (at t = 0) and one year later it paid a $2 dividend (at t = 1). Just after the dividend was paid, the stock price was $19 (at t = 1). Inflation over the past year (from t = 0 to t = 1) was 8% pa, given as an effective annual rate. Which of the following statements is NOT correct? All answer options are rounded to 6 decimal places. The stock investment produced a: Question 3 Select one: a. Nominal capital return of 5.555556% pa. b. Nominal total return of 16.666667% pa. c. Real capital return of 14% pa. d. Real income return of 10.288066% pa. e. Real total return of 8.024692% pa.
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