Expected Rate of Return Formula Quiz
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Questions and Answers

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?

  • 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?

  • 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?

<p>Expected return = (Ending value - Beginning value) / Beginning value (C)</p> Signup and view all the answers

What does the expected rate of return formula take into account?

<p>Both the beginning and ending value (D)</p> Signup and view all the answers

How is income factored into the expected rate of return formula?

<p>Not directly factored into the formula (A)</p> Signup and view all the answers

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