27.03.2023 - 21:47

Suppose you invested $98 in the ishares High Yield Fund (HYG) a month ago. It paid a dividend of $0.47 today and then you sold it for $99. What was your dividend yield and capital gains yield on the investment? (a) 0.45%, 1.09% (b) 0.47%, 1.02% (c) 0.47%,

Question:

Suppose you invested {eq}$98 {/eq} in the ishares High Yield Fund (HYG) a month ago. It paid a dividend of {eq}$0.47 {/eq} today and then you sold it for {eq}$99 {/eq}. What was your dividend yield and capital gains yield on the investment?

(a) {eq}0.45 %, ; 1.09 % {/eq}

(b) {eq}0.47 %, ; 1.02 % {/eq}

(c) {eq}0.47 %, ; 1.08 % {/eq}

(d) {eq}1.02 %, ; 1.12 % {/eq}

Answers (1)
  • Deloris
    April 4, 2023 в 22:08
    The dividend yield is the annual dividend payment divided by the initial investment, expressed as a percentage. In this case, the dividend payment was $0.47 and the initial investment was $98, so the dividend yield is: $0.47 / $98 = 0.0048 or 0.48% The capital gains yield is the increase in the price of the investment, expressed as a percentage of the initial investment. In this case, the initial investment was $98 and the selling price was $99, so the capital gains yield is: ($99 - $98) / $98 = 0.0102 or 1.02% Therefore, the answer is (b) 0.47%, 1.02%.
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