If on January 3 a Company Declares a Dividend of $1.50

question 44

True/False

If on January 3 a company declares a dividend of $1.50 per share,payable on January 31 to holders of record on January 17,then the price of the stock should drop by approximately $1.50 on January 15,which is the ex-dividend date.

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Definitions:

Systematic Risk

Risk factors common to the whole economy; also called market risk or nondiversifiable risk.

Diversified Portfolio

An investment strategy that involves spreading investments across various financial instruments, industries, and other categories to minimize risk.

Rate of Return

A financial metric used to calculate the percentage profit or loss of an investment relative to its cost.

Beta Risk

A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.