If a Stock Pays Dividends at the End of Each

question 53

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

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Definitions:

Price

The amount of money that must be paid to obtain a good or service.

Budget Line

A curve demonstrating the trade-offs between two goods or services that a consumer can afford with a specific budget, considering price changes.

Money Income

The total amount of monetary earnings or revenue received by an individual or a household over a specified period.

Budget Line

A graphical representation showing all possible combinations of goods that can be purchased with a given budget.