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You purchase 100 shares of stock for $50 a share. The stock pays a $2 per share dividend at year-end.

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You purchase 100 shares of stock for $50 a share. The stock pays a $2 per share dividend at year-end.

a.
What is the rate of return on your investment if the end-of-year stock price is (i) $48; (ii) $50; (iii) $54?(Leave no cells blank – be certain to enter “0” wherever required. Enter your answers as a whole percent.)

Stock price Rate of return
$48 %
$50 %
$54 %

b.
What is your real (inflation-adjusted) rate of return if the inflation rate is 3%? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.)

Stock price Real rate of return
$48 %
$50 %
$54 %

 
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