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Last year, you purchased a stock at a price of $51.5 a share. Over the course of

ID: 2693388 • Letter: L

Question

Last year, you purchased a stock at a price of $51.5 a share. Over the course of the year, you received $1.6 in dividends and inflation averaged 2.7 percent. Today, you sold your shares for $53.9 a share. What is your approximate real rate of return on this investment? A)2.5 percent B)10.3 percent C)7.8 percent D)5.1 percent E)10.5 percent A stock has returns of 2 percent, 16 percent, -24 percent, and 17 percent for the past 4 years. Based on this information, what is the 95 percent probability range for any one given year? A)-35.5 to 41.0 percent B)-24.5 to 33.5 percent C)-16.4 to 21.9 percent D)-8.4 to 11.4 percent E)-54.6 to 60.1 percent

Explanation / Answer

Last year, you purchased a stock at a price of $51.5 a share. Over the course of the year, you received $1.6 in dividends and inflation averaged 2.7 percent. Today, you sold your shares for $53.9 a share. What is your approximate real rate of return on this investment?

A)2.5 percent

B)10.3 percent

C)7.8 percent

D)5.1 percent

E)10.5 percent

A stock has returns of 2 percent, 16 percent, -24 percent, and 17 percent for the past 4 years.

Based on this information, what is the 95 percent probability range for any one given year?

A)-35.5 to 41.0 percent

B)-24.5 to 33.5 percent

C)-16.4 to 21.9 percent

D)-8.4 to 11.4 percent

E)-54.6 to 60.1 percent