Answer:
realized return = 20.3%
Explanation:
the formula for calculating realized returns is:
realized return = (future value of the stock + dividend₁ + dividend₂ + dividend₃) / present value of the stock
realized return = [($1,050 + $55 + $55 + $55) / $1,010] - 1 = $1,215 / $1,010 - 1 = 1.203 - 1 = 20.3%
The realized return measures the total return yielded by an investment. It doesn't take in to account the time of the investment, e.g. the 20.3% rate is not per year, instead it is for the whole 3 year period.
