The Price of a Stock Is $55 at the Beginning

question 33

Multiple Choice

The price of a stock is $55 at the beginning of the year and $50 at the end of the year. If the stock paid a $3 dividend and inflation was 3%, what is the real holding-period return for the year?

• A) -3.64%
• B) -6.36%
• C) -6.44%
• D) -11.74%

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Definitions:

Business Segment

A part of a company that can be identified by particular products or services or by geographical areas, generating its own revenue and expenses.

Net Loss

The amount by which a company's expenses exceed its revenues, indicating that the business has spent more than it has earned in a specific period.

Total Cost Method

An accounting method that includes all costs related to the production of goods when calculating inventory cost.

Nonproduction Costs

Expenses not directly associated with the manufacturing or production of goods, such as selling, administrative, and other overhead costs.