You Purchase a Share of Stock for $50 and Sell

question 14

Multiple Choice

You purchase a share of stock for $50 and sell it in one year for $60. Over the year you received a dividend of $4. Your annual return was

• A) 18.6%.
• B) 23.3%.
• C) 25.2%.
• D) 28%.

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Definitions:

Marginal Incentives

Additional rewards or penalties that influence the benefits or costs of engaging in one more unit of an action.

Inequity

The lack of fairness or justice in situations, treatments, or conditions, often used in the context of social or economic disparities.

Excise Taxes

Taxes applied to the purchase of specific goods or activities, sometimes used to discourage consumption of certain items.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is not achievable.