Question text

An investor bought a stock for $15 (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 $13 (at t=1). Inflation over the past year (from t=0 to t=1) was 6% 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 9Select one:

a.

Nominal capital return of -13.333333% pa.

b.

Nominal total return of -6.666667% pa.

c.

Real capital return of -8.133333% pa.

d.

Real income return of 6.289308% pa.

e.

Real total return of -11.949685% pa.