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# BUSN380 Week 4 TCO 4 Problem Set 4 - Calculating Yields, Bond & Book Values, Earnings Per Share

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Solutions: Problem Set 4

1.      Determining Profit or Loss from an Investment.  Three years ago, you purchased 150 shares of IBM stock for \$88 a share.  Today, you sold your IBM stock for \$103 a share.

For this problem, ignore commissions that would be charged to buy and sell your IBM shares.

a.  What is the amount of profit you earned on each share of IBM stock?

Ans.

\$103 – \$88 = \$15

bWhat is the total amount of profit for your IBM investment?

Ans.

\$15 x \$150 = \$2250

2.  Calculating Rate of Return. Assume that at the beginning of the year, you purchase an investment for \$8,000 that pays \$100 annual income. Also assume the investment’s value has decreased to \$7,400 by the end of the year.

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## [Solved] BUSN380 Week 4 TCO 4 Problem Set 4 - Calculating Yields, Bond & Book Values, Earnings Per Share

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Solutions: Problem Set 4 1. Determining Profit or Loss from an Investment. Three years ago, you purchased 150 shares of IBM stock for \$88 a share. Today, you sold your IBM stock...
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