In the Beginning of 2009, You Pay $100 for a Share

question 46

Multiple Choice

In the beginning of 2009, you pay $100 for a share of stock that pays you a dividend of $1 at the beginning of 2010. If the stock price rises from $100 to $109 per share over the year:

• A) then you have earned a rate of 5 percent over 2009.
• B) then you have earned a rate of 1 percent over 2009.
• C) then you have earned a rate of 9 percent over 2009.
• D) then you have earned a rate of 4 percent over 2009.
• E) then you have earned a rate of 10 percent over 2009.

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Definitions:

Escalator Clauses

Contractual provisions allowing for an automatic increase in prices or wages under certain conditions, often tied to inflation rates or cost increases.

Scrap Disposal

The process of getting rid of waste materials, remnants, or byproducts from manufacturing or consumption.

Primary Metals

The unalloyed, pure forms of metals extracted directly from the earth through mining processes, which serve as the basic raw materials for metal production and manufacturing.

Price Fluctuation

Variability in the prices of goods and services over time due to factors like supply and demand dynamics, market conditions, and external economic influences.