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An investor bought a stock for $11 (at t=0) and one year later it paid a $1 dividend (at t=1). Just after the dividend was
An investor bought a stock for $11 (at t=0) and one year later it paid a $1 dividend (at t=1). Just after the dividend was paid, the stock price was $11 (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? The stock investment produced a:
Select one:
a. Nominal capital return of 0% pa.
b. Nominal total return of 9.090909% pa.
c. Real capital return of 8% pa.
d. Real income return of 8.417508% pa.
e. Real total return of 1.010101% pa.
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