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Running Head: INVESTMENT
Q1. buying value = 100*$25 which is $2,500, while the selling value is 100*$27.5 which is
2,750. After subtracting the $50 commission and the buying value from the selling value you get
$2,750 - $50 = $2,700 - 2.500 = $200. The dollar return of the investment is $200, and the
percentage return is $(200/2500) * 100 to get 8%.
Q2. coupon payment = $(1,000 * (6/100))/2, which is $30. The number of coupon payments can
be determined through the payment frequency and the time they take to mature, which is 2*5 to
get 10. The dollar return; thus, becomes payment multiplied by the amount of coupon payments,
which is $30*10 to get $300.
Q3. coupon payment = $(100 * (6/100)), to get $6. The return in dollars is equivalent to the
coupon payment which is $6.
Q4. YTM = 11%, obtained from a calculation where the annuity payment is $72.50, with the
present and future values being $825 and $1,000 respectively.
Q5. HPR = income during the period plus the capital gain/loss the same period, all divided by the
initial value of investment. $((300 + 350)/10.50) = $61.90
Fradin and Fradin (2011) argue that investing is a way of earning where money is
expended into financial schemes with the expectations that, at some point, the money will earn a
profit. It is a way of making more money from the money one already has, without the need to
spend time and effort as one would do in a job. There are numerous types of investments, each
working differently but with the same goal of increasing the investor’s money. There are various
aspects of an investment to look out for, depending on the interests and inclinations of the
investor. Despite the close ...