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EMI, CAGR & Depreciation · Question 43 of 66

Question 43

MediumOriginal question

A share is bought for ₹500, pays a dividend of ₹15 and is sold a year later for ₹470. What is the rate of return?

Options for question 43

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. Gain =(470−500)+15=−15= (470 - 500) + 15 = -15 rupees: a loss.

  2. Rate of return =−15500=−3%= \frac{-15}{500} = -3\%.

Worth noting

−6% leaves out the dividend, which softens the loss.

Concept
A negative rate of return
Typical time
90 s
Your time
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The rule this testsRate of return and CAGR
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