If a Stock Is Purchased at the Beginning of a Year

question 126

Multiple Choice

If a stock is purchased at the beginning of a year, a single dividend is paid at the end of the year and the stock is sold immediately after the dividend has been received. In this case

• A) the internal rate of return is lower than the holding period return.
• B) the holding period return. is lower than the internal rate of return.
• C) it is not possible to calculate the internal rate of return.
• D) the internal rate of return equals the holding period return.