1. Exactly one year ago, Harv bought 500 shares of Primer Corp stock for $40.95. He plans on selling all of the shares today at the current market price of $37.75. Over the last year, Primer Corp. paid out dividends of $0.75 per share on its common stock. What is Harvs holding period return for the year on Primer Corp. stock? Submit your answer as a percentage and round to two decimal places.

(i) Describe and interpret the assumptions related to the problem.

(ii) Apply the appropriate mathematical model to solve the problem

I don't need the mathematical solution, just how to explain these two problems. Here is an example:

A company has an issue of 12-year bonds that pay 5% interest, annually. Further assume that today's required rate of return on these bonds is 7%. How much would these bonds sell for today? Round off to the nearest $1.

(i) The problem assumes that the face value of the bond is $1000. The bond will pay an annual coupon of 5% i.e., coupon or interest amount of $50 is assumed to paid every year. It also assumes that investors currently required a return of 7% on investments with similar risk characteristics. The use of bond valuation concept is appropriate to calculate the true value of these bonds. The accuracy of the solution depends on the correctness of the assumptions on face value, coupon payments and required rate of return assumption.

(ii) The use of bond valuation concept which suggests that the true value of a bond is the present value of its future coupon and face value discounted at investors required rate of return is appropriate to calculate the true value of these bonds. We are required to compute the present value (PV) which represents the true value of the bond