Question
An investor bought a stock for $ 12 (at t=0) and one year later it paid a $ 0 dividend (at t=1). Just after the
An investor bought a stock for $12 (at t=0) and one year later it paid a $0 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 -2% pa (note the negative sign), 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 58.333333% pa.
b.
Nominal total return of -2% pa.
c.
Real capital return of 61.564626% pa.
d.
Real income return of 0% pa.
e.
Real total return of 61.564626% pa.
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