Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Test #1 Review Sheet 1) What is the income, Capital Gain or Loss and total dollar return of a stock that sold at the beginning

image text in transcribed
Test #1 Review Sheet 1) What is the income, Capital Gain or Loss and total dollar return of a stock that sold at the beginning of the year for $33, paid a $0.75 dividend over the course of a year, and is selling for $36.30 at the end of the year? 2) What is the income, Capital Gain or Loss and total dollar return of a stock that sold at the beginning of the year for $20, paid a $0.60 dividend over the course of 3 months, and is selling for $45.20 at the end of 3 months? 3) What is the income, Capital Gain or loss and total dollar return of a 5% coupon bond (paid annually) that sold at the beginning of the year for $1015, and is selling for $1025 at the end of the year? 4) What is the income, Capital Gain or Loss and total dollar return of a 6% coupon bond (paid semiannually) that sold at the beginning of the year for $980, and is selling for $975 at the end of six months? It is often preferable to talk about the percentage rate of return so we classify the income as a yield using terms such as Dividend Yield (for stock) or Current yield (for bonds) and we classify Capital Gains as a yield using terms such as a Capital gain (or Loss) Yield. Rework 1 through 4 and determine the income yield, capital gains yield and total yield for each. What is the annualized yield for each investment

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions