Which of the following investment options is the most profitable in percentage terms?
A) A government bond with a coupon payment of $10, purchased at $100 and sold at $90 after a year.
B) A government bond with a coupon payment of $15, purchased at $175 and sold at $155 after a year.
C) A share with a dividend payment of $5, purchased at $50 and sold at $60 after a year.
D) A Treasury bill purchased at $160 and sold at $175 after a year.

Question

Quizplus · Accepted Answer

To calculate the percentage profit for each investment option, we use the formula:
Percentage Profit = [(Sale Price - Purchase Price) / Purchase Price] * 100%

For option A, Percentage Profit = [($90 - $100) / $100] * 100% = -10%
For option B, Percentage Profit = [($155 - $175) / $175] * 100% = -10.71%
For option C, Percentage Profit = [($60 - $50 + $5) / $50] * 100% = 30%
For option D, Percentage Profit = [($175 - $160) / $160] * 100% = 9.37%

Therefore, Option C is the most profitable with a percentage profit of 30%.

Which of the Following Investment Options Is the Most Profitable