Nico Bought 100 Shares of Cisco Systems Stock for $24

question 43

Multiple Choice

Nico bought 100 shares of Cisco Systems stock for $24.00 per share on January 1, 2002. He received a dividend of $2.00 per share at the end of 2002 and $3.00 per share at the end of 2003. At the end of 2004, Nico collected a dividend of $4.00 per share and sold his stock for $18.00 per share. What was Nico's realized holding period return? What was Nico's compound annual rate of return?

• A) -12.5%; -4.4%
• B) +12.5%; +4.4%
• C) -16.7%; -4.4%
• D) +16.7%; +4.4%

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Definitions:

Dependent Care Expenses Credit

A tax credit that allows taxpayers to claim a percentage of childcare and similar expenses for qualifying dependents.

Adult Child

An individual over the age of majority, which varies by country, but often refers to those over 18 or 21 years old.

Retirement Savings Contributions Credit

A tax credit available to lower-income individuals who contribute to retirement accounts.

AGI

Adjusted Gross Income; income calculation used to determine how much of your income is taxable after certain adjustments are made.