Suppose you invested $100 in the Ishares High Yield Fund (HYG)a month ago.It paid a dividend of $2 today and then you sold it for $99.What was your dividend yield and capital gains yield on the investment?

Question

Quizplus · Accepted Answer

Dividend yield = (dividend paid / initial investment) * 100%
= (2 / 100) * 100%
= 2%
Capital gains yield = [(selling price - initial investment) / initial investment] * 100%
= [($99 - $100) / $100] * 100%
= -1%
Therefore, the correct choice is A, as it represents a dividend yield of 2% and a capital gains yield of -1%.

Suppose You Invested $100 in the Ishares High Yield Fund