Question 17 • CARE_24_25_TX-Mathematical Models with Applications B
Edgar owns 234 shares of Cawh Consolidated Bank, which he bought for $21.38 apiece. Each share pays a yearly dividend of $3.15. Edgar also owns two par value $1,000 bonds from Cawh Consolidated Bank. The bonds had a market value of 105.166 when he bought them, and pay 8.3% interest yearly. Which aspect of Edgar’s investment in Cawh Consolidated Bank offers a greater percent yield, and how much greater is it?
Answer
A
The stocks have a yield 6.43 percentage points greater than that of the bonds.
B
The stocks have a yield 6.84 percentage points greater than that of the bonds.
C
The bonds have a yield 1.05 percentage points greater than that of the stocks.
D
The bonds have a yield 9.13 percentage points higher than that of the stocks.