SIE Exam Question 876: Answer and Explanation

Question: 876

An investor purchased a share of Omikron stock for $90.00 and sold it for $95.50. If the total return was 7.50%, the dividend paid during the holding period was:

• A. $1.20.
• B. $1.25.
• C. $1.35.
• D. $1.40.

Correct Answer: B

Explanation:

R_t = (P_t - P_t-1 + D_t) ÷ P_t-10.075 = ($95.50 - $90.00 + D_t) ÷ $90.00 D_t = $1.25