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2 October, 01:01

A year ago, Phyllis Peterson purchased 100 shares of Fidelity's Contrafund for $50 each. During the year, her total return from dividends was $1 per share, and there were no capital gains distributions. At the end of the year, the shares were worth $54 each. What was Phyllis' RATE (percentage) of return? Begin my calculating her total return. A. $1B. 1%C. 5%D. 10%E. 15%

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  1. 2 October, 02:17
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    option (D) 10%

    Explanation:

    Data provided in the question:

    Purchase price of each share = $50

    Dividend received = $1 per share

    Worth of shares at the end of the year = $54

    Therefore,

    Total return on the share

    = Dividend received + Worth of shares at the end of the year - Purchase price

    = $1 + $54 - $50

    = $5

    Therefore,

    Rate of return = [ Total return on share : Purchase price ] * 100%

    = [ $5 : $50 ] * 100%

    = 0.1 * 100%

    = 10%

    Hence,

    option (D) 10%
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