Interpret Investment Returns
Securities Industry Essentials SIE · Flashcards
SECURITIES INDUSTRY ESSENTIALS SIE · FLASHCARDS
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QUESTION
What is the capital gains yield if a stock rises from $20 to $22 with no dividends?
QUESTION
What is the formula for total return over a period using ending value, beginning value, and income?
QUESTION
What is the total return if
P
0
=
$
40
P_0=\$40
P
0
=
$40
,
P
1
=
$
44
P_1=\$44
P
1
=
$44
, and dividend
D
=
$
1
D=\$1
D
=
$1
per share?
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ANSWER
(
44
−
40
)
+
1
40
=
12.5
%
\frac{(44-40)+1}{40}=12.5\%
40
(
44
−
40
)
+
1
=
12.5%
. Applies the holding period return formula by adding capital gain and dividend, then dividing by initial price.
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