What Is the Return to an Investor Who Purchases a Stock

question 29

Multiple Choice

What is the return to an investor who purchases a stock for $30,receives a $1.50 dividend at the end of the year,and then sells the share for $28.50?

• A) −5%
• B) 0%
• C) 5%
• D) 10%

Analyze the effects of social policies on society, including entitlement programs and their funding mechanisms.

Identify and evaluate the challenges and reforms in health care policy.

Understand taxation principles, including progressive taxation and tax loopholes, and their socioeconomic impacts.

Grasp the role and functions of the Federal Reserve in regulating monetary policy.

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Definitions:

Compound Interest

Interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods, leading to exponential growth.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed on an annual basis, affecting loans, mortgages, savings, and investments.

Discounted Cash Flow

A technique for determining the value of an investment by considering the future cash flows it is projected to generate, factoring in the time value of money.

Present Value

Today's worth of a single sum or series of future cash flows, discounted at a particular rate of return.