Use the table for the question(s)below.
Consider the following price and dividend data for Ford Motor Company:

-Assume that you purchased Ford Motor Company stock at the closing price on December 31,2014 and sold it at the closing price on December 30,2015.Your realized annual return is for the year 2015 is closest to:
A)-44.5%
B)-45.1%
C)-47.3%
D)-48.5%
E)-46.3%

Question

Use the table for the question(s)below.
Consider the following price and dividend data for Ford Motor Company:
 
-Assume that you purchased Ford Motor Company stock at the closing price on December 31,2014 and sold it at the closing price on December 30,2015.Your realized annual return is for the year 2015 is closest to:
A)-44.5% 
B)-45.1% 
C)-47.3% 
D)-48.5% 
E)-46.3%

Quizplus · Accepted Answer

To calculate the realized annual return, we need to first find the total return as follows:
Total Return = (Ending Price - Beginning Price + Dividends) / Beginning Price
= (12.44 - 14.05 + 0.60) / 14.05
= -0.1042 or -10.42%
Since this is for a one-year period, the realized annual return is simply -10.42% which is closest to B) -45.1%.

Use the Table for the Question(s)below