A Common Stock Is Held for 2 Years,during Which Time

question 84

Multiple Choice

A common stock is held for 2 years,during which time it receives an annual dividend of $20.The stock was sold for $100 and generated an average annual return of 32%.What price was paid for the stock?

• A) $61.60
• B) $64.80
• C) $88.00
• D) $90.91

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Definitions:

Budget Constraint

A representation of all the combinations of goods and services that a consumer can afford with a fixed income and prices.

Indifference Curve

A graph representing different bundles of goods between which a consumer is indifferent, showing combinations that give the consumer the same level of satisfaction.

Income

The amount of money or its equivalent received during a period of time in exchange for labor, goods, or services, or as profit on capital.

Indifference Curves

Graphical representations in economics showing combinations of goods among which a consumer is indifferent, helping to analyze consumer choices.