If a Stock Is Purchased for $25 Per Share and Held

question 14

Multiple Choice

If a stock is purchased for $25 per share and held one year, during which time a $3.50 dividend is paid and the price climbs to $28.25, the nominal rate of return is:

• A)13.00 percent.
• B)14.00 percent.
• C)23.01 percent
• D)27.00 percent.

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Definitions:

Expected Monetary Value

A calculation used in decision-making to determine the average outcome when the future includes scenarios that may or may not happen.

EOL Decision

A decision made regarding the end-of-life status of a product, system, or component, often concerning its discontinuation or phased out support.

Prior Probabilities

Probabilities that represent the degree of belief in a hypothesis before observing the current evidence, often used in Bayesian statistics to update beliefs after new data is obtained.

Gross Profits

The difference between the revenue a company earns from selling its products or services and the cost of goods sold.