Self-Assessment HW5E (HPR, Annualized holding period return, Effective annual rate on investment)
.docx
keyboard_arrow_up
School
University of Maryland, University College *
*We aren’t endorsed by this school
Course
330 7980
Subject
Finance
Date
Nov 24, 2024
Type
docx
Pages
4
Uploaded by Dogmom87
Question
1
The
prices
for
the
White
Swan
Corporation
for
the
first
quarter
of
the
last
year
are
given
below.
Find
the
holding
period
return
(percentage
return)
for
February.
End
of
the
month
|
Stock
price
January
94.02
February
9035
March
108.22
Round
the
answers
to
two
decimal
places
in
percentage
form.
(Write
the
percentage
sign
in
the
"units"
box)
Your
Answer:
W
)]
Answer
units
W
Hide
Check
my
answer
(890.35
-894.02)
/$94.02
=
-0.0390
=
-3.90%
Question
2
You
purchased
100
shares
of
General
Motors
stock
at
a
price
of
$98.99
one
year
ago.
You
sold
all
stocks
today
for
$102.76.
During
the
year,
the
stock
paid
dividends
of
$5.79
per
share.
What
is
your
holding
period
return?
Round
the
answers
to
two
decimal
places
in
percentage
form.
(Write
the
percentage
sign
in
the
"units"
box).
Your
Answer:
Answer
units.
W
Hide
Check
my
answer
($102.76
+
$5.79
-
$98.99)/
$98.99
=
$9.56/$98.99
=
0.0966
=
9.66%
Question
3
Sarah
purchased
100
shares
of
General
Electric
stock
at
a
price
of
$53.67
three
months
ago.
She
sold
all
stocks
today
for
$67.53.
During
the
year
the
stock
paid
dividends
of
$4.52
per
share.
What
is
Sarah's
holding
period
return
Round
the
answers
to
two
decimal
places
in
percentage
form.
(Write
the
percentage
sign
in
the
"units"
box)
Your
Answer:
34.25
%
Answer
units
W
Hide
Check
my
answer
($67.53
+
$4.52
-
$53.67)
/
$53.67
=
0.3425
=
34.25%
Question
4
You
purchased
250
shares
of
General
Motors
stock
at
a
price
of
$82.03
two
years
ago.
You
sold
all
stocks
today
for
$78.14.
During
this
period
the
stock
paid
dividends
of
$5.70
per
share.
What
is
your
annualized
holding
period
return
(annual
percentage
rate)?
Round
the
answers
to
two
decimal
places
in
percentage
form.
(Write
the
percentage
sign
in
the
"units"
box)
Your
Answer:
1.10
Answer
units.
W
Hide
Check
my
answer
Step
1:
Calculate
holding
period
return:
(§78.14
+$5.70
-
$82.03)
/$82.03
=
0.02207
=2.207%
Step
2:
Calculate
annualized
holding
period
return
(annual
percentage
rate):
APR
=
HPR/n
In
the
problem
"You
purchased
shares...
two
years
ago’,
so
n=2.
2.207%
/2
=1.10%
Question
5
You
purchased
300
shares
of
General
Electric
stock
at
a
price
of
$61.56
four
years
ago.
You
sold
all
stocks
today
for
$69.92.
During
that
period
the
stock
paid
dividends
of
$3.91
per
share.
What
i
your
annualized
holding
period
return
(annual
percentage
rate)?
Round
the
answers
to
two
decimal
places
in
percentage
form.
(Write
the
percentage
sign
in
the
“units"
box)
Your
Answer:
4.98
%
Answer
units.
W
Hide
Check
my
answer
Step
1:
Calculate
holding
period
return:
(569.92
+$3.91
-
$61.56)
/$61.56
=
0.1993
=19.93%
Step
2:
Calculate
annualized
holding
period
return
(annual
percentage
rate):
APR
=
HPR/n
In
the
problem
“You
purchased
shares...
four
years
ago”,
so
n
=
4
19.93%/
4
=4.98%
%68'T-
=
68100-
=
T-
[Zv((015600°0-+T)]=
T-
[(S'0/T)v((0T5600°0-1+T)]=
T-
[(4/T)v(ddH+T)]=
¥V3
S0
=
Z1/9=u
0s
,08e
syjuow
XIS
saieys
paseydind
Asew,
wajqosd
siuj
uj
2161
[enuue
3AI23Y43
A1eINd[ED
1T
dalS
%O0TS60-
=
0TS600'0
-
=
Zv'6b$/
(Z4'6v$
-
OV
T+
S5'LtS)
:uinja1
poyiad
Suipjoy
ajeinofed
:f
daig
Jamsue
AW
3PaYD
PIH
A
syun
Jamsuy
68T~
+1aMSUY
INOA
(x0q
,s3un,
ay)
ul
usis
agejuadsad
ay)
d31A)
w0y
a8ejuadiad
ur
sadejd
[ewIddP
OM]
0}
SIBMSUE
Ay}
PUNoy
3181
[ENUUE
BAII3443
S
AJEIN
S1
JBYM
“3Ieys
J3d
O
T$
JO
SPUSPIAIP
pred
4001
ayy
poriad
jeyy
BuLINQ
"S6°£b$
10§
ABPOY
SHI0IS
[[E
PIOS
3YS
"08E
SYIUOW
XIS
Z61$
JO
321d
€
38
50S
03
B3
19IMG
JO
SaJeys
00T
paseynd
Asejy
£
uonsand
%L5°8Z
=
(ZT/€)
/
%EEVT'L
“Z1/€
=
u
05,08
yyuow
sa1y
“saseys
paseydund
uyor,
wajgosd
ayy
uf
U/4dH
=
¥dV
«(23e1
28e3uansad
[enuue)
uanja)
poyad
Supjoy
pazijenuue
aje(ndfed
7
dals.
%EEYT'L=
EEYTLO0
=
S6'551$/(S6'STS
-
61°9$+
06109T$)
:uias
poyad
uipjoy
ajenojed
7
dais
JoMSUE
AW
IRUD
SPIH
A
syun
Jamsuy
1587
JBMSUY
INOA
(x0q
,s11un,
2y
Uy
USIs
SFeuS2Iad
BY)
SL)
W0
25eIUBIRA
Uy
SEIEI
[EUIIDIP
OM]
O]
SIOMSUE
Y]
PUNOY
i(@1e4
28equa0sad
[enuue)
uimaa
powad
Suipjoy
pazijenuue
Yol
st
1RYM
“Sieys
Jod
61°9$
JO
SPUBPIAIP
pred
3001s
3y
poyiad
siy)
SuLng
“06'09T$
10§
AEPOY
SHO03S
(|2
PIOS
SH
“08e
SYILOW 331}
S6'SSTS
JO
dud
12
39035
D]
153104
Xoe]g
JO
Saeys
Q0T
paseydnd
utjor
9
uosand
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Question
8
Tom
purchased
100
shares
of
Dalia
Co.
stock
of
at
a
price
of
$129.49
four
months
ago.
He
sold
all
stocks
today
for
$125.12.
During
the
year
the
stock
paid
dividends
of
$5.80
per
share.
What
is
Tom's
effective
annual
rate?
Round
the
answers
to
two
decimal
places
in
percentage
form.
(Write
the
percentage
sign
in
the
"units"
box)
Your
Answer:
3.35
Answer
units.
W
Hide
Check
my
answer
Step
1:
Calculate
holding
period
return:
($125.12
+$5.80
-
$129.49)
/$129.49
=
0.01104
=
1.104%
Step
2:
Calculate
effective
annual
rate:
In
this
problem
“Tom
purchased
shares...
four
months
ago’,
so
n=4/12
=
0.3333
EAR
=[(1+HPR)*(1/n)]
-1
=[(1+0.01104))*(1/0.3333)]
-1
=[(1+0.01104)*3]
-1
=3.35%
Related Questions
You have found the following historical information for the Daniela Company:
Stock
price
EPS
Year 1
Year 2
Year 3
Year 4
$49.24
2.59
$67.43
$61.19
$67.07
2.65
2.82
2.81
Earnings are expected to grow at 8 percent for the next year.
What is the PE ratio for each year? (Do not round intermediate calculations and round
your answers to 2 decimal places, e.g., 32.16.)
Year 1
Year 2
Year 3
Year 4
What is the average PE ratio over this period? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.)
Average PE
Using the company's historical average PE as a benchmark, what is the target stock
price in one year? (Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)
Target price
arrow_forward
Using the information for Hickory Fast Foods Inc. presented in the table below, determine the following:
1. Percentage of change in the stock's price since the beginning of the year.
2. Difference between the closing price today and the closing price on the previous trading day.
3. Price-earnings ratio.
Year-to-Date % Change
12.13% EPS
$2.27
52-Week Hi
$51.78 PE Ratio
20.30
52-Week Lo
$32.59 Volume
3,000,000
Dividend
$0.55 Close Price
$46.09
Yield Percentage
1.19% Net Change
0.42
1. Percentage of change:
?
2. Difference:
3. Price-earnings ratio:
%24
arrow_forward
Consider the following information on the stock market in a small economy.
Shares
Company Outstanding Price, beginning of year Price, end of year
1
100
10
2
1,000
points
3
10,000
$ 100
$ 20
$ 3
$ 94
$ 25
$ 6
Help
Save & Exit
Submit
eBook
References
Instructions: Enter your responses rounded to one decimal place.
a. Compute a price-weighted stock price index for the beginning of the year and the end of the year. What is the percentage change?
The percentage change is |
%.
b. Compute a value-weighted stock price index for the beginning of the year and the end of the year. What is the percentage change?
(Note: The value of a firm is calculated by multiplying the number of its shares by the prices of those shares.)
The percentage change is
%.
arrow_forward
Accounting question please correct solution
arrow_forward
Year AT&T Stock Returns Market Index Returns
1 8 6
2 7 3
3 10 12
4 14 13
5 8 9
Compute the intercept of the characteristic line for AT&T.
Enter answer using 3 decimal places. Example: 0.123
arrow_forward
Question 7
Below is annual tock return data on ABC Corp and XYZ, Inc.
Year ABC XYZ
2010
8% -3%
2011 20%
0%
2012 -8% 20%
2013
4%
8%
v (a)
What is the average return and standard deviation for each stock? (Round answers to 2 decimal places, e.g. 52.75.)
ABC
XYZ
Average return
Standard deviation
(b)
The parts of this question must be completed in order. This part will be available when you complete the part above.
arrow_forward
Use the information in the following stock quote to answer the question:
As of February 1, 2XX1
Name
Symbol
Open
High
Low
Close
Net Chg
Div
Yield
PE
Target
TGT
87.01
87.32
86.75
87.05
-0.32
2.56
2.93
16.76
What was Target’s earnings per share over the last year? (Round your answer to 2 decimal places. (e.g., 32.16))
arrow_forward
K
The following spreadsheet contains monthly returns for Cola Co. and Gas Co. for
2013. Using these data, estimate the average monthly return and the volatility for
each stock. (Click on the following icon in order to copy its contents into
a spreadsheet.)
The average monthly return for Cola Co. is% (Round to two decimal places)
January
February
March
April
May
June
July
August
September
October
November
CELLS
Month
Cola Co
-0.20%
-7.20%
6.26%
-7.10%
1.60%
-4.90%
3.00%
-2.70%
0.00%
10.50%
4.90%
Gas Co.
0.30%
-3.90%
-3.70%
4.90%
-5.70%
-4.60%
0,70%
-6.40%
-0.90%
10.20%
-6.70%
arrow_forward
Please give me answer general financce
arrow_forward
Year AT&T Stock Returns Market Index Returns
1 8 6
2 7 3
3 10 12
4 14 13
5 8 9
Compute the beta for AT&T using the historic returns presented above.
Enter answer using 4 decimal places. Example: 0.1234
arrow_forward
You have found the following historical information for DEF
Company:
Year1 Year 2 Year 3
$46.88
$49
$53.14
$2.33
$2.74
$2.96
$3.9
Earnings are expected to grow at 9 percent for the next
year. Using the company's historical average PE as a
benchmark, what is the target stock price in one year?
Answer to two decimals.
Stock Price
EPS
Year 4
$57.87
arrow_forward
None
arrow_forward
Here are the percentage returns on two stocks.
Month
Digital Cheese
Executive Fruit
January
13
%
7
%
February
–4
2
March
7
5
April
9
15
May
–5
1
June
5
7
July
–3
–7
August
–9
–5
a-1. Calculate the monthly variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 1 decimal places.)
a-2. Which stock is the riskier if held on its own?
b. Now calculate the variance and standard deviation of the returns on a portfolio that invests an equal amount each month in the two stocks. (Do not round intermediate calculations. Round your answers to 1 decimal places.)
c. Is the variance more or less than half way between the variance of the two individual stocks?
arrow_forward
A compay expects earnings to be $3.18 next year, after earning $3.00 this year. With PEG
ratio of 2.00x, the company's current stock price is closet to: A. $36.00 B. $38.16 C. $39.30
D. $40.45
arrow_forward
Heer
arrow_forward
None
arrow_forward
Detailed answer
arrow_forward
Consider the following annual returns of Molson Coors and International Paper:
Molson Coors
International Paper
Year 1
19.3
%
5.1
%
Year 2
−
9.0
−18.1
Year 3
39.5
−0.8
Year 4
−
8.1
27.2
Year 5
16.8
−11.7
Compute each stock’s average return, standard deviation, and coefficient of variation. (Round your answers to 2 decimal places.)
Molson Coors
International Paper
Average return
%
%
Standard deviation
%
%
Coefficient of variation
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you
Fundamentals of Financial Management, Concise Edi...
Finance
ISBN:9781285065137
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Fundamentals of Financial Management, Concise Edi...
Finance
ISBN:9781305635937
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Related Questions
- You have found the following historical information for the Daniela Company: Stock price EPS Year 1 Year 2 Year 3 Year 4 $49.24 2.59 $67.43 $61.19 $67.07 2.65 2.82 2.81 Earnings are expected to grow at 8 percent for the next year. What is the PE ratio for each year? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Year 1 Year 2 Year 3 Year 4 What is the average PE ratio over this period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Average PE Using the company's historical average PE as a benchmark, what is the target stock price in one year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Target pricearrow_forwardUsing the information for Hickory Fast Foods Inc. presented in the table below, determine the following: 1. Percentage of change in the stock's price since the beginning of the year. 2. Difference between the closing price today and the closing price on the previous trading day. 3. Price-earnings ratio. Year-to-Date % Change 12.13% EPS $2.27 52-Week Hi $51.78 PE Ratio 20.30 52-Week Lo $32.59 Volume 3,000,000 Dividend $0.55 Close Price $46.09 Yield Percentage 1.19% Net Change 0.42 1. Percentage of change: ? 2. Difference: 3. Price-earnings ratio: %24arrow_forwardConsider the following information on the stock market in a small economy. Shares Company Outstanding Price, beginning of year Price, end of year 1 100 10 2 1,000 points 3 10,000 $ 100 $ 20 $ 3 $ 94 $ 25 $ 6 Help Save & Exit Submit eBook References Instructions: Enter your responses rounded to one decimal place. a. Compute a price-weighted stock price index for the beginning of the year and the end of the year. What is the percentage change? The percentage change is | %. b. Compute a value-weighted stock price index for the beginning of the year and the end of the year. What is the percentage change? (Note: The value of a firm is calculated by multiplying the number of its shares by the prices of those shares.) The percentage change is %.arrow_forward
- Accounting question please correct solutionarrow_forwardYear AT&T Stock Returns Market Index Returns 1 8 6 2 7 3 3 10 12 4 14 13 5 8 9 Compute the intercept of the characteristic line for AT&T. Enter answer using 3 decimal places. Example: 0.123arrow_forwardQuestion 7 Below is annual tock return data on ABC Corp and XYZ, Inc. Year ABC XYZ 2010 8% -3% 2011 20% 0% 2012 -8% 20% 2013 4% 8% v (a) What is the average return and standard deviation for each stock? (Round answers to 2 decimal places, e.g. 52.75.) ABC XYZ Average return Standard deviation (b) The parts of this question must be completed in order. This part will be available when you complete the part above.arrow_forward
- Use the information in the following stock quote to answer the question: As of February 1, 2XX1 Name Symbol Open High Low Close Net Chg Div Yield PE Target TGT 87.01 87.32 86.75 87.05 -0.32 2.56 2.93 16.76 What was Target’s earnings per share over the last year? (Round your answer to 2 decimal places. (e.g., 32.16))arrow_forwardK The following spreadsheet contains monthly returns for Cola Co. and Gas Co. for 2013. Using these data, estimate the average monthly return and the volatility for each stock. (Click on the following icon in order to copy its contents into a spreadsheet.) The average monthly return for Cola Co. is% (Round to two decimal places) January February March April May June July August September October November CELLS Month Cola Co -0.20% -7.20% 6.26% -7.10% 1.60% -4.90% 3.00% -2.70% 0.00% 10.50% 4.90% Gas Co. 0.30% -3.90% -3.70% 4.90% -5.70% -4.60% 0,70% -6.40% -0.90% 10.20% -6.70%arrow_forwardPlease give me answer general financcearrow_forward
- Year AT&T Stock Returns Market Index Returns 1 8 6 2 7 3 3 10 12 4 14 13 5 8 9 Compute the beta for AT&T using the historic returns presented above. Enter answer using 4 decimal places. Example: 0.1234arrow_forwardYou have found the following historical information for DEF Company: Year1 Year 2 Year 3 $46.88 $49 $53.14 $2.33 $2.74 $2.96 $3.9 Earnings are expected to grow at 9 percent for the next year. Using the company's historical average PE as a benchmark, what is the target stock price in one year? Answer to two decimals. Stock Price EPS Year 4 $57.87arrow_forwardNonearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Fundamentals of Financial Management, Concise Edi...FinanceISBN:9781285065137Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningFundamentals of Financial Management, Concise Edi...FinanceISBN:9781305635937Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
- Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Fundamentals of Financial Management, Concise Edi...
Finance
ISBN:9781285065137
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Fundamentals of Financial Management, Concise Edi...
Finance
ISBN:9781305635937
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning