a) Capital appreciation of stock plus dividends received, divided by initial investment
b) Capital appreciation of stock less inflation rate, divided by initial investment
c) Capital appreciation of stock plus dividend received less inflation rate, divided by initial investment
d) Capital appreciation of stock plus dividends received, divided by sale amount of investment
correct answer is a)
For equity investments, the total return is:
Capital appreciation + dividends received
the example, the capital appreciation is $750 ($10,750-$10,000),
$250 ($1.00 multiplied by 250 shares), for a
total gain of $1,000. You then divide your total
($1,000) by the initial investment ($10,000)
for a total return
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