Rate of return for investment

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Q1: Three years ago, you purchased 204 shares of IBM stock for $151 a share. Today, you sold your IBM stock for $163 a share. For this problem, ignore commissions that would be charged to buy and sell your IBM shares and dividends you might have received as a shareholder.

(a) What is the amount of profit you earned on each share of IBM stock?

Amount of profit per share $

(b) What is the total amount of profit for your IBM investment?

Total amount of profit $

Q2 Assume that at the beginning of the year, you purchase an investment for $14,700 that pays $95 annual income. Also assume the investment's value has increased to $15,800 by the end of the year.

(a) What is the rate of return for this investment? (Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.)

Rate of return

(b) Is the rate of return a positive or negative number?

Positive return on investment

Negative return on investment

Q3 Three years ago you purchased a corporate bond that pays 6.40 percent annual interest. The face value of the bond is $25,000. What is the total dollar amount of interest that you received from your bond investment over the three-year period? (Do not round intermediate calculations.)

Total amount of interest $

Q4 Three years ago, you purchased 170 shares of IBM stock for $130 a share. Today, you sold your IBM stock for $153 a share. For this problem, ignore commissions that would be charged to buy and sell your IBM shares and dividends you might have received as a shareholder.

(a) What is the amount of profit you earned on each share of IBM stock?

Amount of profit per share $

(b) What is the total amount of profit for your IBM investment?

Total amount of profit $

Q5 Assume that at the beginning of the year, you purchase an investment for $4,800 that pays $144 annual income. Also assume the investment's value has to $5,000 by the end of the year.

(a) What is the rate of return for this investment? (Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.)

Rate of return

(b) Is the rate of return a positive or negative number?

Negative return on investment 
Positive return on investment

Q6 Assume that you purchased a corporate bond with a face value of $5,000. The interest rate is 4.80 percent. What is the dollar amount of annual interest you will receive each year?

Amount of annual interest $

Q7 Three years ago you purchased a corporate bond that pays 8.90 percent annual interest. The face value of the bond is $25,000. What is the total dollar amount of interest that you received from your bond investment over the three-year period? (Do not round intermediate calculations.)

Total amount of interest $

Reference no: EM131113874

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