An investor bought a stock for $17 (at t=0) and one year later it paid a $3 dividend (at t=1). Just after the dividend was paid, the stock price was $11 (at t=1). Inflation over the past year (from t=0 to t=1) was 10% pa, given as an effective annual rate. Which of the following statements is NOT correct? All answer options are rounded to 6 decimal places. The stock investment produced a:Question 3Select one:a.Nominal capital return of -17.647059% pa.b.Nominal income return of 17.647059% pa.c.Real capital return of -41.176471% pa.d.Real income return of 16.042781% pa.e.Real total return of -25.13369% pa.

To answer this question, we first need to calculate the nominal and real returns for both the capital and income components of the investment.

1. Nominal Capital Return: This is the change in the price of the stock, not including dividends. The stock was bought for $17 and sold for$11, so the nominal capital return is (11-17)/17 = -35.294118%. So, option a is incorrect.

2. Nominal Income Return: This is the dividend received as a percentage of the initial investment. The dividend was $3 and the initial investment was$17, so the nominal income return is 3/17 = 17.647059%. So, option b is correct.

3. Real Capital Return: This is the nominal capital return adjusted for inflation. The formula for the real return is (1 + nominal return)/(1 + inflation rate) - 1. So, the real capital return is (1 - 0.35294118)/(1 + 0.1) - 1 = -41.176471%. So, option c is correct.

4. Real Income Return: This is the nominal income return adjusted for inflation. Using the same formula as above, the real income return is (1 + 0.17647059)/(1 + 0.1) - 1 = 6.792453%. So, option d is incorrect.

5. Real Total Return: This is the sum of the real capital return and the real income return. So, the real total return is -41.176471% + 6.792453% = -34.384018%. So, option e is incorrect.

Therefore, the statements that are NOT correct are options a, d, and e.