In: Economics
a)
Face Value = $1000
Buying Price = $950
Time period = 91 days
So Yield = (1000 - 950) /950 * 365/91 = 21.11%
b)
Initial Value = 8000
Perpetual Payment = 500
So yield(i),
8000 = 500/i
i = 6.25%
c)
Dividend = $2
Capital Gain = 73-60 = $13
So total return = $13 + $2 = $15
So return = 15/60 = 25%