Last year, William purchased 85 shares of Stock A at $80 per share, 40 shares of Stock B at $225 per share, and a $1500 bond with a 5.75% coupon for $1525. William sold both stocks today. Stock A is worth $86 per share and Stock B has a value of $240. Assuming neither stock paid a dividend, which investment has the lowest rate of return?

Stock A

Stock B

Bond

Stock A and Stock B

Question

Last year, William purchased 85 shares of Stock A at $80 per share, 40 shares of Stock B at $225 per share, and a $1500 bond with a 5.75% coupon for $1525. William sold both stocks today. Stock A is worth $86 per share and Stock B has a value of $240. Assuming neither stock paid a dividend, which investment has the lowest rate of return?

 Stock A

 Stock B

 Bond

 Stock A and Stock B

anonymous · Answer

the bond assuming annual compounding of the coupon and its redemption at Par today