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Five years ago, benjamin invested in parchar special effects. he purchased four par value $1,000 bonds from parchar special effects at a market rate of 96.230. each bond had an interest rate of 7.2%. benjamin also purchased 200 shares of stock in the same company, each of which cost $19.08 and had a yearly dividend of $2.04. today, bonds from parchar special effects have a market rate of 104.595, and stock in parchar special effects costs $22.62. if benjamin liquidates his portfolio and sells all of his investments, which aspect of his investment will have yielded him a greater total profit, and how much greater is it?

Respuesta :

robertlsanow

Answer:

The answer is D. $973.36

Step-by-step explanation:

I'm taking the test, but the answer the other guy gave is slighty off, so I'm just correcting their error.

anthougo

The aspect of Benjamin's investments that yielded him a greater total profit is his investment in Parchar stocks, and by $973.40.

Data and Calculations:

                                                     Bonds           Stock

Purchase cost                          $3,849.20        $3,816

                                 (96.230 x $1,000 x 4)    ($19.08 x 200)

Interest rate of bonds                 7.2%

Dividend per share                                           $2.04

Annual income for 5 years      $1,440            $2,040

                                 ($4,000 x 7.2% x 5)       (200 x $2.04 x 5)

Current market value              $4,183.80       $4,524

                                 (104.595 x $1,000)        ($22.62 x 200)

Profit from sale                        $334.60            $708 ($4,524 - $3,816)

Total profit from investment $1,774.60       $2,748 ($2,040 + $708)

Benjamin's investments in stocks yielded $973.40 ($2,748 - $1,774.60) more in profits than the bonds.

Thus, the aspect of Benjamin's investments that yielded him a greater total profit is the investment in Parchar stocks, and by $973.40.

Learn more about investments in bonds and stocks here: https://brainly.com/question/25115202 and https://brainly.com/question/25300925

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