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Author Question: Richard bought a share of stock for 47.50 that paid a dividend of .72 and sold one year later for ... (Read 220 times)

drink

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on: Jul 10, 2018
Richard bought a share of stock for 47.50 that paid a dividend of .72 and sold one year later for 51.38. What was Richard's dollar profit or loss and holding period return?
 
  A) 0.72, 7.55
  B) 3.88, 8.95
  C) 4.60, 9.68
  D) 3.88, 9.68

Question 2

Ralph bought a share of stock for 31.50 that paid a dividend of .85 and sold six months later for 27.65. What was his dollar profit or loss and holding period return?
 
  A) -3.00, -9.52
  B) -3.85, -12.22
  C) -.85, -2.70
  D) -3.85, -9.52


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brbarasa

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: C
Explanation: C) Profit = Ending Value + Distributions - Original Cost
Profit = 51.38 + 0.72 - 47.50 = 4.60.
HPR = = = 9.68.

Answer to Question 2

Answer: A
Explanation: A) Profit = Ending Value + Distributions - Original Cost
Profit = 27.65 + 0.85 - 31.50 = -3.00.
HPR = = = -9.52.


drink

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Reply #2 on: Jul 10, 2018
Correct answers!


brbarasa

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Reply #3 on: Jul 10, 2018
Great! Please up vote :D


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