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NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Investing in Stocks (NISM XXI-A)

A stock bought at Rs 800 pays a dividend of Rs 24 during the year and is sold at Rs 872 at year end. What is the total return for the year?

The total return is 12.0%. The capital gain of Rs 72 plus the dividend of Rs 24 gives Rs 96, which is divided by the purchase price of Rs 800. Both price appreciation and dividend income count in total return.

  1. A9.0%
  2. B12.0%
  3. C3.0%
  4. D10.0%Correct

Explanation

Capital gain = 872 - 800 = Rs 72. Add dividend Rs 24 to get Rs 96. Total return = 96/800 = 12%. Hold on: 96/800 = 0.12, so the correct value is 12.0%.

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