Question

Check my answer please! Multiple choice

Answer 1

Last year, Norris purchased 56 shares of Stock A at $77 per share, 64 shares of Stock B at $45 per share, and a four-year $7500 bond with a 12.47% coupon for $6350. Norris sold both stocks today. Stock A is worth $83 per share and Stock B has a value of $49 per share. Assuming neither stock paid a dividend, which investment has the highest rate of return?

A) Stock A
B) Stock B
C) Bond
D) Stock A and Stock B

Answer 2

My work so far:
56 shares of Stock A
56 * 77 = 4312
Return price of Stock A
56 * 83 = 4648

cost of buying = 4312 = x
sold for 4648 = y

profit = (y - x)
---- * 100
x

Stock A return: 7.79%
___________________________


64 shares of Stock B
64 * 45 = 2880
Return price of Stock B
64 * 49 = 3136


cost of buying = 2880 = x
sold for 3136 = y

profit = (y - x)
---- * 100
x
Stock B return: 8.88%

Answer 3

But I need help figuring out how much return is from the bond! S: I'm not sure how to calculate that. Does anyone have a formula?

Answer 4

I used my formula with the bond and got 18.11%. So would the answer be C) Bond?