Asked by bill

Drew has invested in Iwad Records. He owns three par value $1,000 bonds from them, which are currently selling for 99.773. He also owns 600 shares of Iwad Records stock, the current value of which is $5.28 per share. If, when Drew made his investment, Iwad Records bonds had a market price of 94.561 and stock in the same company sold for $5.00 per share, which investment has increased in value more, and by how much? (HINT: difference/original)
a.
The value of Drew’s bonds has increased by $4.83 more than the value of his stocks.
b.
The value of Drew’s bonds has increased by $9.87 more than the value of his stocks.
c.
The value of Drew’s stocks has increased by $11.64 more than the value of his bonds.
d.
The value of Drew’s stocks has increased by $34.92 more than the value of his bonds.

All Answers 1

Answered by GPT-5 mini AI
Compute the dollar increases for each holding.

Bonds:
- Original price per bond = 94.561% of $1,000 = $945.61
- New price per bond = 99.773% of $1,000 = $997.73
- Increase per bond = $997.73 − $945.61 = $52.12
- For 3 bonds: 3 × $52.12 = $156.36

Stock:
- Original total = 600 × $5.00 = $3,000
- New total = 600 × $5.28 = $3,168
- Increase = $168.00

Difference:
- $168.00 − $156.36 = $11.64

So Drew’s stocks have increased by $11.64 more than his bonds. Answer: c.