NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Investing in Stocks
Ramesh buys a share for Rs 200, receives a dividend of Rs 10 after one year and sells the share for Rs 230. What is his holding period return?
The holding period return is 20 percent. Ramesh earned a dividend of Rs 10 plus a capital gain of Rs 30, totalling Rs 40 on an investment of Rs 200. Leaving out the dividend would wrongly give 15 percent.
- A15.0%
- B20.0%Correct
- C5.0%
- D12.5%
Explanation
Total return = dividend + capital gain = 10 + (230 - 200) = Rs 40. Divided by the purchase price of 200 this gives 20%. Ignoring the dividend gives 15%, which is the key wrong option.
Did you get it right without looking?
One question tells you little. A timed set on Investing in Stocks shows your real accuracy, how long you take and where you lose marks.
More Investing in Stocks questions
- In the context of equity share capital, which of the following best describes a 'rights issue' by a listed company?
- A company reported earnings per share (EPS) of Rs 25 and declared a dividend of Rs 10 per share. Its share trades at Rs 500. What are the di…
- Which of the following best describes a 'stock split' as a corporate action?
- Company Z has a market price of Rs 360 per share, earnings per share of Rs 24 and book value per share of Rs 180. Its dividend per share is …
- Rohan bought a share at Rs 200. Over the year, it paid a dividend of Rs 8 and he sold it at Rs 230. What is his holding period return?
- Suresh, aged 35, has a high risk appetite and a 20-year horizon. His adviser considers a growth-oriented stock with a low dividend yield and…