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%

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Definitions:

Conflict Theory

A sociological perspective that views social life as a competition, with individuals and groups struggling over resources and power.

Labeling Theory

A sociological theory that suggests the self-identity and behavior of individuals may be determined or influenced by the terms used to describe or classify them.

David Rosenhan

A psychologist known for his influential study "On Being Sane in Insane Places," which challenged the validity of psychiatric diagnoses.

Pseudo-Patients

Individuals who simulate illness to study the treatment environment and practices within mental health institutions, notably in the Rosenhan experiment.