You purchased shares of stock one year ago at a price of $63.47 per share. During the year, you received dividend payments of $1.97 and sold the stock for $70.59 per share. If the inflation rate during the year was 2.47 percent, what was your real return?
|(1+Real return)||(1+Nominal return)/(1+Inflation rate)|
|Nominal return from assets||(Sale price - Purchase price + Dividend)/Purchase price|
|Nominal return from assets||(70.59-63.47+1.97)/63.47|
|Nominal return from assets||9.09/63.47|
|Nominal return from assets||14.32%|
|Thus, real return is 11.57%|
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