Timothy Keating Invested $120 in Buying a Share of Company

question 12

Multiple Choice

Timothy Keating invested $120 in buying a share of company X in June last year. Although the company had announced that it will not pay any dividend, the price of this share has increased over the last few months and is expected to go up to $140 by June this year. If the expected annual inflation rate in June this year is 5%, calculate Timothy's real rate of return from this investment if he sells the share at $140.

• A) 11.11%
• B) 14.29%
• C) −22.22%
• D) −10%

---

Definitions:

Me Decade

A term popularized by writer Tom Wolfe to describe the 1970s in the United States, characterized by a shift towards personal self-improvement, self-exploration, and a focus on individual rights and identity.

Helsinki Accords

An agreement signed in 1975 by 35 nations, including the US and the Soviet Union, aimed at improving relations between the Communist bloc and the West, and addressing security, cooperation, and human rights.

Malaise Speech

A 1979 speech by U.S. President Jimmy Carter, famously addressing the crisis of confidence among the American public but not actually using the word "malaise."

Televangelists

Religious leaders who spread their messages through television broadcasts, often appealing for financial support from viewers.