Suppose You Purchase One Share of the Stock of Volatile

question 35

Multiple Choice

Suppose you purchase one share of the stock of Volatile Engineering Corporation at the beginning of year 1 for $36. At the end of year 1, you receive a $2 dividend and buy one more share for $30. At the end of year 2, you receive total dividends of $4 (i.e., $2 for each share) and sell the shares for $36.45 each. The time-weighted return on your investment is

• A) -1.75%.
• B) 4.08%.
• C) 6.74%.
• D) 11.46%.
• E) 12.35%.

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Definitions:

Delegator

A delegator is a person or entity that assigns duties or responsibilities to another, often in the context of a contractual or work-related relationship.

Non-assignable

A characteristic of a contract or right indicating that it cannot be transferred or delegated to another party without the consent of the original party or parties.

Contract Rights

Contract rights refer to the entitlements and obligations that are legally binding between parties as stipulated in a contract.

Revocability

The ability to nullify, cancel, or repeal an agreement or contract.