Yes, Linda earns a 16% rate of return.
To support this statement, calculations are provided below:
Common stock
Gain on sale ($160,000 - $95,000)
= $ 65,000
Preferred stock
Dividends paid (6% x $30,000 x 3 years)
= 5,400
Loss on sale ($27,000 - $30,000)
= 3,000
Bonds:
Interest paid - ($ 6,000 x 3 years)
= 18,000
Gain on sale - ($52,700 - $50,000)
= 2,700
Net gain on all investments - $88,100
= $88,100 / 3 years / $175,000 = 16.8%
<h3>What do you mean by the term investments?</h3>
A purchase made with the intention of creating income or capital growth is known as an investment. An asset's value increasing over time is referred to as appreciation. When a person invests in a good, they do not intend to utilize it as a source of immediate consumption, but rather as a tool for future wealth creation. An investment always entails the expenditure of some capital—time, effort, money, or an asset—today with the expectation of a future return higher than the initial investment. For instance, an investor might buy a financial asset right away with the hope that it would provide income later on or that it can be sold for a profit at a higher price.
To learn more about Investments, visit:
brainly.com/question/14682309
#SPJ4
