Five years ago, Benjamin invested in Parchar Special Effects. He purchased four par value \( \$ 1,000 \) bonds from Parchar Special Effects at a market rate of 96.230 . Each bond had an interest rate of \( 7.2 \% \). Benjamin also purchased 200 shares of stock in the same company, each of which cost \( \$ 19.08 \) and had a yearly dividend of \( \$ 2.04 \). Today, bonds from Parchar Special Effects have a market rate of 104.595 , and stock in Parchar Special Effects costs \( \$ 22.62 \). If Benjamin liquidates his portfolio and sells all of his investments, which aspect of his investment will have yielded him a greater total profit, and how much greater is it? a. The bonds yielded \( \$ 940.20 \) more in profits than the stocks. b. The bonds yielded \( \$ 33.00 \) more in profits than the stocks. c. The stocks yielded \( \$ 373.20 \) more in profits than the bonds. d. The stocks yielded \( \$ 973.40 \) more in profits than the bonds.

To determine which aspect of Benjamin's investment yielded a greater total profit, we need to calculate the total profit from both the bonds and the stocks. ### Bonds 1. **Initial Investment in Bonds:** - Number of bonds: 4 - Par value of each bond: \( \$ 1,000 \) - Total par value: \( 4 \times 1,000 = \$ 4,000 \) - Market rate at purchase: 96.230 (which means he paid 96.230% of par value) - Purchase price: \( 4,000 \times \frac{96.230}{100} = \$ 3,849.20 \) 2. **Interest Earned:** - Interest rate: \( 7.2\% \) - Annual interest per bond: \( 1,000 \times 0.072 = \$ 72 \) - Total annual interest for 4 bonds: \( 4 \times 72 = \$ 288 \) - Total interest earned over 5 years: \( 288 \times 5 = \$ 1,440 \) 3. **Current Value of Bonds:** - Current market rate: 104.595 - Current value: \( 4,000 \times \frac{104.595}{100} = \$ 4,183.80 \) 4. **Total Profit from Bonds:** - Total profit = Current value + Total interest - Initial investment - Total profit = \( 4,183.80 + 1,440 - 3,849.20 = 1,774.60 \) ### Stocks 1. **Initial Investment in Stocks:** - Number of shares: 200 - Cost per share: \( \$ 19.08 \) - Total initial investment: \( 200 \times 19.08 = \$ 3,816 \) 2. **Dividends Earned:** - Yearly dividend per share: \( \$ 2.04 \) - Total annual dividends for 200 shares: \( 200 \times 2.04 = \$ 408 \) - Total dividends earned over 5 years: \( 408 \times 5 = \$ 2,040 \) 3. **Current Value of Stocks:** - Current price per share: \( \$ 22.62 \) - Current value: \( 200 \times 22.62 = \$ 4,524 \) 4. **Total Profit from Stocks:** - Total profit = Current value + Total dividends - Initial investment - Total profit = \( 4,524 + 2,040 - 3,816 = 2,748 \) ### Comparison of Profits - Total profit from bonds: \( 1,774.60 \) - Total profit from stocks: \( 2,748 \) ### Difference in Profits - Difference = Profit from stocks - Profit from bonds - Difference = \( 2,748 - 1,774.60 = 973.40 \) ### Conclusion The stocks yielded \( \$ 973.40 \) more in profits than the bonds. Therefore, the correct answer is: **d. The stocks yielded \( \$ 973.40 \) more in profits than the bonds.**