Question

A Treasury bond that you own at the beginning of the year is worth $1,045. During the year, it pays $37 in interest payments and ends the year valued at $1,055.

  

What was your dollar return and percent return?

Answer 1

1)

Dollar return = Ending value + interest - beginning value

Dollar return = 1,055 + 37 - 1045

Dollar return = $47

2)

Percent return = (47 / 1,045) * 100

Percent return = 4.50%