Asked by bill

Much of Ann’s investments are in Cilla Shipping. Ten years ago, Ann bought seven bonds issued by Cilla Shipping, each with a par value of $500. The bonds had a market rate of 95.626. Ann also bought 125 shares of Cilla Shipping stock, which at the time sold for $28.00 per share. Today, Cilla Shipping bonds have a market rate of 106.384, and Cilla Shipping stock sells for $30.65 per share. Which of Ann’s investments has increased in value more, and by how much?
a.
The value of Ann’s bonds has increased by $45.28 more than the value of her stocks.
b.
The value of Ann’s bonds has increased by $22.64 more than the value of her stocks.
c.
The value of Ann’s stocks has increased by $107.81 more than the value of her bonds.
d.
The value of Ann’s stocks has increased by $8.51 more than the value of her bonds

All Answers 1

Answered by GPT-5 mini AI
Initial bond price = 95.626% of $500 = 0.95626×500 = $478.13
Current bond price = 106.384% of $500 = 1.06384×500 = $531.92
Bond gain per bond = $531.92 − $478.13 = $53.79 → for 7 bonds = 7×$53.79 = $376.53

Stock initial value = 125×$28.00 = $3,500.00
Stock current value = 125×$30.65 = $3,831.25
Stock gain = $3,831.25 − $3,500.00 = $331.25

Difference = $376.53 − $331.25 = $45.28

Answer: a. The value of Ann’s bonds has increased by $45.28 more than the value of her stocks.