This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Tom purchased Hampton Industries Inc. stock for 14.65 and sold it 6 months later for 17.38 after ... (Read 49 times)

ericka1

  • Hero Member
  • *****
  • Posts: 544
on: Jul 10, 2018
Tom purchased Hampton Industries Inc. stock for 14.65 and sold it 6 months later for 17.38 after receiving a 0.25 dividend. What Tom's holding period return (HPR), Annual Percentage Rate (APR), and Effective Annual Rate (EAR)?
 
  A) 20.34, 40.68, 9.70
  B) 18.63, 37.27, 40.74
  C) 17.15, 34.29, 37.23
  D) 20.34, 40.68, 44.82

Question 2

You purchased 100 shares of stock for 5 per share. After holding the stock for 8 years and not receiving any dividends, you sell the stock for 42 per share. What are the holding period and annual return on this investment?
 
  A) 920, 41.63
  B) 740, 30.48
  C) 625, 27.66
  D) 185, 14.42


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

aliotak

  • Sr. Member
  • ****
  • Posts: 326
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: D
Explanation: D) HPR = = = 20.34,
APR = = = 40.68, EAR = (1 + HPR)(1/n) - 1 = (1.2034)(2) - 1 = 44.82.

In this case, n =0.5 years.

Answer to Question 2

Answer: B
Explanation: B) HPR = = (42 - 5)/5 = 740
EAR = (1 + hpr) (1/n) - 1 = (1+7.4)(1/8) - 1 = 30.48.


ericka1

  • Member
  • Posts: 544
Reply 2 on: Jul 10, 2018
Excellent

DylanD1323

  • Member
  • Posts: 314
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Though newer “smart” infusion pumps are increasingly becoming more sophisticated, they cannot prevent all programming and administration errors. Health care professionals that use smart infusion pumps must still practice the rights of medication administration and have other professionals double-check all high-risk infusions.

Did you know?

A good example of polar molecules can be understood when trying to make a cake. If water and oil are required, they will not mix together. If you put them into a measuring cup, the oil will rise to the top while the water remains on the bottom.

Did you know?

A recent study has found that following a diet rich in berries may slow down the aging process of the brain. This diet apparently helps to keep dopamine levels much higher than are seen in normal individuals who do not eat berries as a regular part of their diet as they enter their later years.

Did you know?

The average adult has about 21 square feet of skin.

Did you know?

Each year in the United States, there are approximately six million pregnancies. This means that at any one time, about 4% of women in the United States are pregnant.

6 months in the uterus 6 months in the uterus
Bereaved spouses studied before loss, at the time of loss, and 18 months after loss show five ... Bereaved spouses studied before loss, at the time of loss, and 18 months after loss show five ...
Chiropractor (stock image) Chiropractor (stock image)
Hector makes payments of $2000.00 into an RRSP at the beginning of every six months starting ... Hector makes payments of $2000.00 into an RRSP at the beginning of every six months starting ...
Tickets for the school play were $3 for students and $5 for all others. The box office sold 750 ... Tickets for the school play were $3 for students and $5 for all others. The box office sold 750 ...
An inventory record sheet shows a balance on hand of 972. During the month units sold were 111, ... An inventory record sheet shows a balance on hand of 972. During the month units sold were 111, ...
Video: HIV replication/ Replication cycle of HIV

For a complete list of videos, visit our video library