Study the following information, calculate

问题单项选择题

Study the following information, calculate the expected rate of return. index is now selling at $490. market index multiplier is expected to be 5X. index earnings is expected to be $100. dividend payment is expected to be $40.（）

A. 10%.

B. 20%.

C. 30%.

答案

参考答案：A

解析：

Step1: Calculate the ending index value = $100×5=$500

Step2: Calculate the expected return.

E(R₁)=[Dividends + (Ending value - Beginning value)]/(Beginning value)=[40+(500-490)]/490 =0.1 or 10%