2) You bought 1500 shares of Microsoft one year ago for $120 per share. Microsoft paid a $2 (per-share) dividend last year. The current stock price is $105. a. What rate of return did you earn from your Microsoft investment? b. If inflation rate over the last year was 4%, what is your real rate of return? c. Rather than buying 1500 Microsoft shares a year ago, you instead sold them short. What is the rate of return from your Microsoft trade now?
2) You bought 1500 shares of Microsoft one year ago for $120 per share. Microsoft paid a $2 (per-share) dividend last year. The current stock price is $105. a. What rate of return did you earn from your Microsoft investment? b. If inflation rate over the last year was 4%, what is your real rate of return? c. Rather than buying 1500 Microsoft shares a year ago, you instead sold them short. What is the rate of return from your Microsoft trade now?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
![2) You bought 1500 shares of Microsoft one year ago for $120 per share. Microsoft paid
a $2 (per-share) dividend last year. The current stock price is $105.
a. What rate of return did you earn from your Microsoft investment?
b. Ifinflation rate over the last year was 4%, what is your real rate of return?
c. Rather than buying 1500 Microsoft shares a year ago, you instead sold them
short. What is the rate of return from your Microsoft trade now?
Focu
MacBook Pro
A](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F62ef46e2-1b41-490a-9d0b-4f5756a0a089%2Fda0d37aa-7613-404c-b7a1-e0ef1d79ea36%2Fzq6grum_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2) You bought 1500 shares of Microsoft one year ago for $120 per share. Microsoft paid
a $2 (per-share) dividend last year. The current stock price is $105.
a. What rate of return did you earn from your Microsoft investment?
b. Ifinflation rate over the last year was 4%, what is your real rate of return?
c. Rather than buying 1500 Microsoft shares a year ago, you instead sold them
short. What is the rate of return from your Microsoft trade now?
Focu
MacBook Pro
A
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