Amy Bought a Share of Stock for $64

question 39

Multiple Choice

Amy bought a share of stock for $64.50 that paid a dividend of $.50 and sold nine months later for $64.00. What was her dollar profit or loss and holding period return?

• A) $0.50, 0.78%
• B) -$0.50, -0.78%
• C) $0.00, 0.00%
• D) There is no correct solution to this question.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or business activity.

Variable Costs

Expenses that change in proportion to the production output or sales.

Operating Leverage

The degree to which a company can increase its profits by increasing sales, highlighting the proportion of fixed costs in a company’s cost structure.

Forecasting Risk

The uncertainty in predicting future values due to unforeseen events or inaccuracies in analysis, affecting strategic and operational decisions.