An investor buys a stock for $1,200 at the beginning of a year. The stock pays him a dividend of $150 over the year, and the worth of the stock appreciates by $300 at the end of the year. If the annual rate of inflation is 6%, what is the loss in principal value due to inflation?
A. $18
B. $27
C. $72
D. $247.5
Answer: C
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Companies that cooperate extensively with competitors:
a. often do so because they are desperate. b. experience a lower return on equity than companies that have an intermediate level of competitor alliance intensity. c. experience a higher return on equity than companies that have an intermediate level of competitor alliance intensity. d. experience about the same return on equity as companies that have an intermediate level of competitor alliance intensity. e. should try to "beat" the alliance partner.
Which of the following is true of the change in the weighted average cost of capital of a firm??
A. A decrease in the weighted average cost of the capital increases the value of the firm.? B. ?An increase in the weighted average cost of the capital increases the value of the firm. C. ?A decrease in the weighted average cost of the capital decreases the value of the firm. D. ?A decrease in the weighted average cost of the capital increases the cash flow generated by the investments. E. ?Any change in the weighted average cost of capital results in no change in the value of the firm.
Which one of the following statements is correct concerning international funds?
A) A devaluation of the dollar causes returns on foreign investments to improve from a U.S. perspective. B) International funds are considered low-risk investments. C) Balance-of-trade positions do NOT affect the rate of return from a U.S. perspective. D) Technically, global funds can only invest in foreign securities.