Series 65: Total Return

Taken from our Series 65 Online Guide

Total Return

An investor may earn additional revenues from an investment in addition to appreciation in the value of the investment.

Total return includes appreciation, as well as dividends and interest (income).

34267.png

Example Question 1

Jake bought 1,000 shares of XYZ Company at $25. Two years later, Jake sold his shares at $30. In that period, the company paid a $.25 quarterly, per share dividend. Calculate Jake’s annualized total return, not taking into account compounded interest.

Answer: 14%

Explanation: Appreciation on XYZ = $30,000 – $25,000 = $5,000

XYZ dividends = $.25 x 8 quarters x 1,000 shares = $2,000

total return = (appreciation or loss in value + dividends and interes

Since you're reading about Series 65: Total Return, you might also be interested in:

Solomon Exam Prep Study Materials for the Series 65
Please Enable Javascript
to view this content!