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Questions and Answers
What is the formula for the expected rate of return?
What is the formula for the expected rate of return?
- Expected Return = (Ending Value - Beginning Value) * Beginning Value
- Expected Return = (Ending Value + Beginning Value + Dividends) / Beginning Value
- Expected Return = (Ending Value - Beginning Value + Dividends) / Beginning Value (correct)
- Expected Return = (Ending Value - Beginning Value) / Beginning Value
What does the 'Ending Value' represent in the expected rate of return formula?
What does the 'Ending Value' represent in the expected rate of return formula?
- The average value of the investment
- The final value of the investment (correct)
- The value of dividends received
- The initial value of the investment
How are dividends considered in the expected rate of return formula?
How are dividends considered in the expected rate of return formula?
- Dividends are subtracted from the ending value and divided by the initial investment
- Dividends are not considered in the formula
- Dividends are added to the change in value and divided by the initial investment (correct)
- Dividends are multiplied by the ending value and added to the initial investment
What is the formula for the expected rate of return?
What is the formula for the expected rate of return?
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What does the expected rate of return formula take into account?
What does the expected rate of return formula take into account?
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How is income factored into the expected rate of return formula?
How is income factored into the expected rate of return formula?
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