Paula bought a stock for $200 last year and sold it today for $150.If she earned a dividend of $100 while she held the stock her rate of return was
A)-50%.
B)-25%.
C)25%.
D)33.33%.
E)50%.

Question

Quizplus · Accepted Answer

Paula's total return is the sum of the capital loss and the dividend received. The capital loss is $150 - $200 = -$50. The dividend received is $100. So, the total return is -$50 + $100 = $50. The rate of return is the total return divided by the initial investment: $50 / $200 = 0.25 or 25%.

Paula Bought a Stock for $200 Last Year and Sold