The Total Return on a Share of Stock Refers to the Dividend

question 48

True/False

The total return on a share of stock refers to the dividend yield less any commissions paid when the stock is purchased and sold.

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Definitions:

Prime Rate

The interest rate that commercial banks charge their most creditworthy customers, often used as a benchmark for other interest rates.

Effective Interest Rate

The real rate of interest earned or paid on a loan or investment, accounting for the effect of compounding over the period.

Compensating Balance

A minimum account balance that a borrower must maintain as a condition for borrowing from a lender or for obtaining favorable loan terms.

Stated Interest Rate

This refers to the nominal or advertised interest rate on a loan or financial product, not accounting for compounding or fees.