Real reverse Nominal Returns
posted by Antoinette .
You purchase 100 shares of stock for $40 a share. The stock pays a $2 per share dividend at yearend. What is the rate of return on your investment for these endofyear stock prices? What is your real (inflationadjusted) rated of return? Assume an inflation rate of 4 percent.
a. $38
b. $40
c. $42

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