Last year, norvin purchased 42 shares of stock a at $50 per share, 124 shares of stock b at $25 per share, and a four-year $3500 bond with an 8.54% coupon for $5950. norvin sold both stocks today. stock a is worth $58 per share and stock b has a value of $29 per share. assuming neither stock paid a dividend, which investment has the highest rate of return? (4 points)

stock a

stock b

bond

stock a and stock b

and explain why!

  Stock A and Stock B

Step-by-step explanation:

After 1 year, the value of Stock A is 58/50 = 1.16 times what it was, an increase of 16%.

After 1 year, the value of Stock B is 29/25 = 1.16 times what it was, an increase of 16%.

The bond has coupon value of $298.90 each year, about 5.02% of the amount invested. (However, the value of the bond at the end of 4 years is only $3500, so represents a net loss of about $1254.40 over that time period. We're not quite sure why Norvin purchased this bond at that price.)

Stock A and Stock B have the highest rate of return.