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please answer and help explain how to calculate capital gains and value of the investment Blueprint Problems Ch 12 Billingsley Understanding the Approximate Yield Equation

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please answer and help explain how to calculate capital gains and value of the investment

Blueprint Problems Ch 12 Billingsley Understanding the Approximate Yield Equation The formula for the approximate yield of an investment can look intimidating, but it's really just a function of three things: (1) average current income, (2) average capital gains, and (3) the average value of the investment. Based on the information in the table, compute each of these values for the two stocks over a 3-year period and enter the values into the bottom half of the table. Stock 2 Expected average annual dividends (2012-2014) Current stock price Expected future stock price (2014) Stock 1 $1.00 $60 $78 $2.70 $117 $144 $1.00$2.70 Average current income (CI) Average capital gains (CG) Average value of the investment (VI) Next, derive the correct formula for approximate yield by correctly arranging these three variables in the equation that follows. Approximate Yield Avg. CI Avg. VI Avg. CI + Avg CG Avg. CI + Avg VI Avg. VI + Avg CG Avg, CG , you can see that the approximate and the approximate yield for $78 $144 $1.00$2.70 Average current income (CI) Average capital gains (CG) Average value of the investment (VI) Next, derive the correct formula for approximate yield by correctly arranging these three variables in the equation that follows. Approximate Yield Avg. CG Avg. CI + Avg CG Avg. CI Avg. VI Avg CG Using this formula, you can see that the approximate Stock 2 is Avg. CI Avg VI and the approximate yield for Avg. VI True or False: If both investments carry the same rate of risk, Stock 2 is a better investment than Stock 1 O Type here to search Next, derive the correct formula for approximate yield by cofrety arrariging talables itle that follows. Approximate Yield isand the approximate yield for Using this formula, you can see that the approximate yield for Stock 1 is Stock 2 is 8.97% 0.01% 0.09% 10.14% True or False: If both investments carry the same rate of risk, Stock 2 is! stment than Stock 1 11.67% O True O False All Type here to search Approximate Yield = Using this formula, you can see that the approximate yield for Stock 1 is Stock 2 is and the approximate yield for 10.14% 0.07% True or Fal 14.80% nvestments carry the same rate of risk, Stock 2 is a better investment than Stock 1. 0 Tru 0.02% O False Flash 142 Type here to search Using this formula, you can see that the approximate yield for Stock 1 is Stock 2 is and the approximate yield for True or False: If both investments carry the same rate of risk, Stock 2 is a better investment than Stock 1. O True O False 0 Type here to search

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