Introduction to Financial Markets (405) — CBSE Class 10 board question

An investor in equities receives two types of returns:

1. Capital Appreciation – The increase in the market price of the share over time. For example, the Nifty index has given approximately 16% annual return on average over the last fifteen years.

1. Dividend – A portion of the company's profits distributed to shareholders. On average, stocks have paid about 1.5% dividend annually.

Source: Chapter 4, Section 4.2.1

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• Examiners expect both types to be named and briefly explained — just naming them without explanation will likely fetch only 1 mark.
• Quoting the approximate figures (16% capital appreciation, 1.5% dividend) adds precision and shows textbook knowledge, but is not compulsory.
• Keep it concise — this is a 2-mark answer, so one line per type is sufficient.