The Finance Club at a local university makes short-term investments in stock to study trends in various sectors of the stock market. On October 1, 2014, they purchased 100 shares of LeTableaux stock for $6,150. After eight months, the stock shares had increased in value by $135.00 and had paid dividends (part of a company's profit paid to stockholders) totaling $142.68. The Club decides to sell the stock at this point and evaluate their investment. Compare their gain to a bank savings plan paying simple annual interest (for 8 months) to determine the interest rate that this gain represents.

The Finance Club at a local university makes short-term investments in stock to study trends in various sectors of the stock market. On October 1, 2014, they purchased 100 shares of LeTableaux stock for $6,150. After eight months, the stock shares had increased in value by $135.00 and had paid dividends (part of a company's profit paid to stockholders) totaling $142.68. The Club decides to sell the stock at this point and evaluate their investment. Compare their gain to a bank savings plan paying simple annual interest (for 8 months) to determine the interest rate that this gain represents.

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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