Question

Stock in Ombor Medical Supplies earns a return of 5. 3% annually, while bonds issued by Ombor Medical Supplies earns a return of 4. 1% annually. If you invest a total of $2,400 in Ombor Medical Supplies, $1,400 of which is in bonds and $1,000 of which is in stocks, which side of the investment will show a greater return after six years, and how much greater will it be? a. The stocks will earn $55. 60 more than the bonds. B. The stocks will earn $118. 60 more than the bonds. C. The bonds will earn $82. 00 more than the stocks. D. The bonds will earn $26. 40 more than the stocks.

Answer 1

The investment in bonds will give better returns to Ombor Medical Supplies than returns in stock. Thus, Option d. Bonds will earn $ 26.40 more than shares is the correct answer.

What is a bond?

A bond is a fixed payment obligation issued by a company or state-owned company to investors.

As per the information given, assuming the same prices are followed for 6 years.

Stock at Ombor Medical Supplies earns a return of 5.3% per annum,  so $ 1000 will produce annually;

$\rm\,0.053\times\,\ 1,000 = 53\,dollars\\\\Total\,amount\,in\,6\,years = \ 53\times6= 318 dollars$                                                                                                        

Bonds issued by Ombor Medical Supplies earn a return of 4.1% per annum, so $ 1400 will be issued annually;

$\rm\,0.041\times\,\ 1,400 = 57.4\,dollars\\\\ Total\,amount\,in\,6\,years = \ 57.4\times6=344.40\,dollars$

We see that bonds have a higher yield than stocks.

$\rm\,Value\,of\,the\,difference = \ 344.40\,-\, \ 318 = \ 26.40$

Therefore, bonds will earn $ 26.40 more than shares. Option D. is the correct answer.

To learn more about the Bonds, refer to the link:

brainly.com/question/25596583