Which of the Following Formulas Is Incorrect

question 87

Multiple Choice

Which of the following formulas is incorrect?

• A) Capital Gains Rate =
• B) Dividend Yield =
• C) P₀ = +
• D) r_E = Capital Gains Rate + Dividend Yield

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Definitions:

Foreign-Currency Exchange

The system through which currencies are traded and exchanged at determined rates, enabling international trade and investments.

Nominal Exchange Rate

The rate at which a person can trade the currency of one country for the currency of another.

Real Interest Rate

The inflation-adjusted interest rate, signifying the actual cost of borrowing and the genuine return for investors.

Net Capital Outflow

The net flow of funds used for investment in foreign countries minus the flow of funds from foreign investments into the domestic market.