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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Investing in Stocks

Meera, 35, is a client of an investment adviser. She holds a stock bought at Rs 250 that paid a dividend of Rs 10 during the year and is now priced at Rs 275. What is her total return for the year?

Her total return is 14%. The capital gain is Rs 25 and the dividend is Rs 10, giving Rs 35 on a cost of Rs 250. Ignoring the dividend would give only 10%, understating the total return.

  1. A14%Correct
  2. B10%
  3. C4%
  4. D15%

Explanation

Capital gain = 275 - 250 = Rs 25. Total gain = 25 + 10 = Rs 35. Return = 35/250 = 14%. Counting only the capital gain gives 10%, and only dividend yield gives 4%.

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