You purchase 100 shares of stock for $50 a share. The stock pays a $2 per share dividend at year-end. a. What is the rate of return on your investment if the end-of-year stock price is (1) $48; (ii) $50; (ii) $54? (Leave no cells blank -b certain to enter "0" wherever required. Enter your answers as a whole percent.) Stock Price Rate of Return 48 50 % 54 % b. What is your real (inflation-adjusted) rate of return if the inflation rate is 3%? (Do not round intermediate calculations. Enter you answers as a percent rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) Stock Price Real Rate of Return 48 % 50 54

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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You purchase 100 shares of stock for $50 a share. The stock pays a $2 per share dividend at year-end.
a. What is the rate of return on your investment if the end-of-year stock price is (1) $48; (ii) $50; (ii) $54? (Leave no cells blank - be
certain to enter "0" wherever required. Enter your answers as a whole percent.)
Stock Price
Rate of Return
48
50
%
54
b. What is your real (inflation-adjusted) rate of return if the inflation rate is 3%? (Do not round intermediate calculations. Enter your
answers as a percent rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.)
Stock Price
Real Rate of Return
48
%
50
%
54
%
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Transcribed Image Text:You purchase 100 shares of stock for $50 a share. The stock pays a $2 per share dividend at year-end. a. What is the rate of return on your investment if the end-of-year stock price is (1) $48; (ii) $50; (ii) $54? (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.) Stock Price Rate of Return 48 50 % 54 b. What is your real (inflation-adjusted) rate of return if the inflation rate is 3%? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) Stock Price Real Rate of Return 48 % 50 % 54 % < Prev 3 of 3 Next Desktop o search SUS 近
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