Last Year, You Purchased a Stock at a Price of $53.60

Multiple Choice

Last year, you purchased a stock at a price of $53.60 a share. Over the course of the year, you received $1.50 in dividends and inflation averaged 2.9%. Today, you sold your shares for $55.90 a share. What is your approximate real rate of return on this investment?

A) 4.2%
B) 7.1%
C) 7.9%
D) 8.6%
E) 10.0%