One Year Ago, You Purchased 400 Shares of Stock at a Cost

question 102

Multiple Choice

One year ago, you purchased 400 shares of stock at a cost of $5,000. The stock paid an annual dividend of $11.30 per share. Today, you sold those shares for $23.50 each. What is the capital gains yield on this investment?

• A)8.80%
• B)9.96%
• C)11.50%
• D)12.7%
• E)14.75%

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Definitions:

Spot Rate

The present market value at which a specific currency can be purchased or exchanged for instant delivery.

Interest Rate Parity

A theory stating that the difference in interest rates between two countries is equal to the difference between the forward exchange rate and the spot exchange rate.

Spot Rate

The current market price of a foreign currency, commodity, or security for immediate delivery or settlement.