Answer:
The stocks yields 14.73% per year
the bonds yields 7.89% per year
The stock provide a better yield, which is 6.84% greater than bonds yield
Explanation:
the return will be calculate as follow:
return/ investment cost
stocks
return 3.15 dividends
cost 21.38 each stock
yield:
3.15 / 21.38 = 0,14733395 = 14.73%
bonds
return: cuopon payment 1,000 x 8.3% = 83
cost : market value 1,000 x 105.166/100 = 1,051.66
yield:
83/1051.66 = 0,07892284 = 7.89%
Difference:
stocks 14.73 - bonds 7.89 = 6.84
