Question

At the beginning of the​ year, you bought 100 shares of Google common stock for ​$95​, and over the course of the​ year, the company paid a dividend of ​$4 per share. At the end of the​ year, you sell your 100 shares for ​$110. The inflation rate for the year was 3 percent. The nominal return on your investment was ___ %.The real return on your investment was ___%.

Answer 1

The nominal return on your investment was 11.58%.The real return on your investment was 14.58%.

Step-by-step explanation:

real return = [[110- (95 + 4)]/95]*100

= 11.58%

nominal return = real return + inflation

= 11.58% + 3%

= 14.58%

Therefore, The nominal return on your investment was 11.58%.The real return on your investment was 14.58%.