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Suppose You Buy 100 Shares of Abolishing Dividend Corporation at the Beginning

Question 64

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Suppose you buy 100 shares of Abolishing Dividend Corporation at the beginning of year 1 for $80.Abolishing Dividend Corporation pays no dividends.The stock price at the end of year 1 is $100, $120 at the end of year 2, and $150 at the end of year 3.The stock price declines to $100 at the end of year 4, and you sell your 100 shares.For the four years, your geometric average return is


A) 0.0%.
B) 1.0%.
C) 5.7%.
D) 9.2%.

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