Which one of the following statements best describes how a change in a firm’s stock price would affect a stock capital gains yield:
a) capital gains yield on a stock that an investor already owns has an inverse relationship with the firms expected future stock price.
b)capital gains yield on a stock that an investor already owns has a direct relationship with the firms expected future stock price
answer : b)capital gains yield on a stock that an investor already owns has a direct relationship with the firms expected future stock price
Explanation
Capital Gains Yield means , price appreciation in security’s total return. For stock holdings, the capital gains yield will be the change in price divided by the original (purchase) price. This means capital gains yield on a stock that an investor already owns has a direct relationship with the firms expected future stock price
