If a Stock Pays Dividends at the End of Each

question 6

Multiple Choice

If a stock pays dividends at the end of each quarter, with realized returns of R₁, R₂, R₃, and R₄ each quarter, then the annual realized return is calculated as:

• A) R_annual =
• B) R_annual = (1 + R₁)(1 + R₂)(1 + R₃)(1 + R₄)
• C) R_annual = (1 + R₁)(1 + R₂)(1 + R₃)(1 + R₄) - 1
• D) R_annual = R₁ + R₂ + R₃ + R₄

---

Definitions:

Maturity Value

The amount payable to an investor at the maturity date of an investment, including principal and interest.

Investment

Allocation of resources, usually money, in the expectation of generating an income or profit.

Maturity Value

The amount payable to the holder of a financial instrument at the end of its term, including both the principal and interest.

Investment

Investment refers to the act of allocating resources, usually money, with the expectation of generating an income or profit.