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If a Stock Pays Dividends at the End of Each

Question 4

Multiple Choice

If a stock pays dividends at the end of each quarter, with realized returns of R1, R2, R3, and R4 each quarter, then the annual realized return is calculated as:


A) Rannual = If a stock pays dividends at the end of each quarter, with realized returns of R<sub>1</sub>, R<sub>2</sub>, R<sub>3</sub>, and R<sub>4</sub> each quarter, then the annual realized return is calculated as: A) R<sub>annual </sub>= B) R<sub>annual </sub>= (1 + R<sub>1</sub>) (1 + R<sub>2</sub>) (1 + R<sub>3</sub>) (1 + R<sub>4</sub>) C) R<sub>annual </sub>= (1 + R<sub>1</sub>) (1 + R<sub>2</sub>) (1 + R<sub>3</sub>) (1 + R<sub>4</sub>) - 1 D) R<sub>annual </sub>= R<sub>1</sub> + R<sub>2</sub> + R<sub>3</sub> + R<sub>4</sub>
B) Rannual = (1 + R1) (1 + R2) (1 + R3) (1 + R4)
C) Rannual = (1 + R1) (1 + R2) (1 + R3) (1 + R4) - 1
D) Rannual = R1 + R2 + R3 + R4

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