Question
PLEASE ANSWER ONLY Q4. ADDED Q1-3 TO HELP SOLVE Q4. THANKS Q1 On February 1, you bought 100 shares of stock in the Francesca Corporation
PLEASE ANSWER ONLY Q4. ADDED Q1-3 TO HELP SOLVE Q4. THANKS
Q1 On February 1, you bought 100 shares of stock in the Francesca Corporation for $34 a share and a year later you sold it for $39 a share. During the year, you received a cash dividend of $1.50 a share. Compute your HPR and HPY on this Francesca stock investment.
Q 2. On August 15, you purchased 100 shares of stock in the Cara Cotton Company at $65 a share and a year later you sold it for $61 a share. During the year, you received dividends of $3 a share. Compute your HPR and HPY on your investment in Cara Cotton.
Q3. At the beginning of last year, you invested $4,000 in 80 shares of the Chang Corporation. During the year, Chang paid dividends of $5 per share. At the end of the year, you sold the 80 shares for $59 a share. Compute your total HPY on these shares and indicate how much was due to the price change and how much was due to the dividend income. 4.
Q4 The rates of return computed in Problems 1, 2, and 3 are nominal rates of return. Assuming that the rate of inflation during the year was 4 percent, compute the real rates of return on these investments. Compute the real rates of return if the rate of inflation was 8 percent.
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