Joel purchased a security at the start of the year for $900. Over the course of the year, the security paid $17 in income and the price at the end of the year was $907. Calculate the capital gains yield.
Suppose you are an investor with a choice between three securities that are identical in every way except in terms of their rates of return and risk.
- Investment A:
Total return = 10 percent with probability 50 percent
Total return = 20 percent with probability 50 percent
Total return = 12 percent with probability 40 percent
Total return = 18 percent with probability 60 percent
Total return = 5 percent with probability 60 percent
Total return = 25 percent with probability 40 percent
The expected return of investment C is ____ percent