Question

All are ways to break up (or add up to) the total return except: A. Income...

All are ways to break up (or add up to) the total return except:

A. Income + Appreciation

B. Riskfree Rate + Risk Premium

C. Nominal Return + Real Return + Probability of becoming a famous youtuber

D. Real Return + Inflation Premium

E. Yield + Capital Gain

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Answer #1

Correct answer is Option (C)

The Income with appreciation is the break-up of total return especially in the case of real estate investment. That means, the return is from the rental income and also from the capital appreciation.

The risk free returns along with risk premium is the total return in the cases of Security such as stock. The real return along with inflation premium is another break-up considering the effect of inflation. The yield and capital gain etc. Also is breakup of total return in some circumstances. But, the probability of becoming a famous YouTuber is never a breakup of total return.

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