Common Stock Is Held for Two Years, During Which Time

question 27

Multiple Choice

Common stock is held for two years, during which time it receives an annual dividend of $10.The stock was sold for $100 and generated an average annual return of 16 percent.What price was paid for the stock?

• A)$61.60
• B)$64.80
• C)$88.00
• D)$90.90 .32 =

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Definitions:

Corporate Insider

A person within an organization, typically an executive or employee, who has access to confidential or non-public information.

Short-swing Profits

Profits earned by corporate insiders from buying and selling their company's stock within a short timeframe, subject to specific legal regulations and reporting requirements.

Security

A financial instrument representing an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Securities Exchange Act

A U.S. law enacted in 1934 to govern the trading of securities, such as stocks and bonds, aimed at protecting investors from fraud.