Realized Returns Should Include Both Dividends and Price Changes

question 41

True/False

Realized returns should include both dividends and price changes.

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Definitions:

Nominal Discount Rate

The discount rate before adjusting for inflation, reflecting the interest rate that a bank or lender specifies.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, thereby eroding purchasing power.

Real Terms

Refers to economic indicators or values that have been adjusted for inflation, allowing for the comparison of quantities as if prices had not changed over time.

Deposits

Funds placed into an account at a financial institution for safekeeping, which may earn interest over time depending on the account type.