Compare Adobe's HPR (100% long) to the HPR on Nasdaq. Select the answer which best represents the correct conclusion: Adobe has the higher return so the stock is a better investment than the Nasdaq index. Nasdaq has the higher return so the market is a better investment than Adobe. Adobe has a higher return than Nasdaq because shareholders receive a $0.57 dividend and holders of the Nasdaq index receive no dividends. No decision can be made because the source of the gains may not continue in the future. No decision can be made because risk differences have not been determined. All of the above. Assume the 6.75 Oct. 1, 2024 T-bond is purchased on 15-Sep and sold on 30- Sep rather than 10-Nov. Will the change in the sell date result in a higher or lower current yield? Higher because CR exceeds the yield Higher because the holding period is shorter Lower because the CY is higher Lower because the holding period is shorter No change because the coupon rate is fixed. Table 9.1 Date Transaction Prices Adobe T-bond Nasdaq 100 Index 72.61 125.0125 1962.87 81.69 125.725 2035.92 0 8 15-Sep 10-Nov Stock 6.75% 10/01/24 T- Bond Stock index t 0 8. Table 9.2 Maturity 10/1/24 10/1/24 Coupon 6.75 6.75 T-Bond Quotations Bid Asked Chg 124.9783 125.0125 -0.0078 125.725 126.1325 0.0103 Ask Yld 7.12 6.95 Compare Adobe's HPR (100% long) to the HPR on Nasdaq. Select the answer which best represents the correct conclusion: Adobe has the higher return so the stock is a better investment than the Nasdaq index. Nasdaq has the higher return so the market is a better investment than Adobe. Adobe has a higher return than Nasdaq because shareholders receive a $0.57 dividend and holders of the Nasdaq index receive no dividends. No decision can be made because the source of the gains may not continue in the future. No decision can be made because risk differences have not been determined. All of the above. Assume the 6.75 Oct. 1, 2024 T-bond is purchased on 15-Sep and sold on 30- Sep rather than 10-Nov. Will the change in the sell date result in a higher or lower current yield? Higher because CR exceeds the yield Higher because the holding period is shorter Lower because the CY is higher Lower because the holding period is shorter No change because the coupon rate is fixed. Table 9.1 Date Transaction Prices Adobe T-bond Nasdaq 100 Index 72.61 125.0125 1962.87 81.69 125.725 2035.92 0 8 15-Sep 10-Nov Stock 6.75% 10/01/24 T- Bond Stock index t 0 8. Table 9.2 Maturity 10/1/24 10/1/24 Coupon 6.75 6.75 T-Bond Quotations Bid Asked Chg 124.9783 125.0125 -0.0078 125.725 126.1325 0.0103 Ask Yld 7.12 6.95
