19. Investors access real stock-price quotes minute-by-minute even on a smart phone. So why does Finance then put forth the scientific or theoretical Equation Four below for stock-price (Pe) when the fact of each stock price is so readily listed? Equation Four: P₁ - Divi (1+r) . Divy (1+r) Divy (1+r)' Div. (1 + r.)" P. (1 + r.)

19. Investors access real stock-price quotes minute-by-minute even on a smart phone. So why does Finance then put forth the scientific or theoretical Equation Four below for stock-price (Pe) when the fact of each stock price is so readily listed? Equation Four: P₁ - Divi (1+r) . Divy (1+r) Divy (1+r)' Div. (1 + r.)" P. (1 + r.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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common stock? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the firm's EV/EBITDA? Until not round intermediate calculations, Round your answer to two decimal places.
What is the reward-to-risk ratio for Stock X, in decimal form? Round your answer to 4 decimal places (example: if your answer is .03579, you should enter .0358). Margin of error for correct responses: +/- .0005. expected return (implied by market price) Beta Stock X 9.6% 1.46 S&P500 12% ? T-bills 4% ?
Question 2. Consider the data in the table bolow, which shows the relevant data for the stocks of six firms: GE, Apple, Bank of America, Exxon, Pfizer, and Home Depot. Rf is the risk-free rate and Ap:/p;is the growth rate of the stock price. Additionally, the table has the actual market price of each stock (PM) as of September 2016. Use the stock price arbitrage equation to calculate the no-arbitrage price of each stock. Given your answer, should you buy the stock or put the money into a safe asset? Firm Dividend RF Ap:/ps рм GE 0.38 4.2 3.18 32.1 Apple 2.03 4.2 2.04 106.1 Bank of America 0.2 4.2 3.4 15.9 Еxxon 0.75 4.2 3 87.5 Pfizer 1.12 4.2 1.5 35.7 Home Depot 1.78 4.2 3.01 135 Source: Morningstar, Sept. 1, 2016.
Consider the following table, which gives a security analyst’s expected return on two stocks and the market index in two scenarios: Scenario Probability Market Return Aggressive Stock Defensive Stock 1 0.5 6% 2.0% 5.0% 2 0.5 20 32 15 Required: a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Beta A : Beta D: b. What is the expected rate of return on each stock? (Round your answers to 2 decimal places.) % Rate of Return on A: % Rate of Return on B:
分时均价:14.63 最新:14.68 This moment) Question: According to the real- time data chart at this moment(before the closing time), Could we predict the shape of the K-line at the closing moment , and then, make the decision that whether buy this stock or not at this moment?
Question 2. At current time t a stock paying no income has price 45, the forward price with maturity T on the stock is 40, and the price of a zero coupon bond with maturity T is 0.95. Determine whether there is an arbitrage opportunity. If there is, find an arbitrage portfolio. Verify the portfolio you construct is an arbitrage portfolio.
What is the intrinsic price of a stock that pays a dividend of $2.43, has a dividend growth rate of 3.5% and a Beta of 1.20? The market return is 5.15% and the risk free rate is 3%. O A. $21.84 O B. $33.66 O C. $40.67 O D. $120.92 QUESTION 18 What is the intrinsic price of a stock that pays a dividend of 60 cents, has a dividend growth rate of 4.80% and a Beta of 2.57? The market return is 7.75% and the risk free rate is 2.5%. O A. $1.22 O B. $5.62 O C. $6.19 O D. $25.39
Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Recession .17 .08 −.12 Normal .58 .11 .17 Boom .25 .16 .34 a. Calculate the expected return for Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation for Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
D3) Finance IS THIS TRUE OR FALSE? with proof if you can. "An investor is drawing the graph of implied volatility as a function of moneyness (wheremoneyness is measured as strike price divided by today’s stock price) for options on theexchange rate SEK/USD, using 3 months options with various strikes. According to theBlack-Scholes-Merton model the graph should, if markets are free of arbitrage, look like asmile with at-the-money options having low implied volatility and out-of the money andin-the-money options having high implied volatility" Is this statement true or false?
品 Check my work Consider the following information: Probability of Rate of Return if State Occurs State of Economy Economy Stock A Stock B .050 130 .220 -33 .23 oped Recession .23 Normal .63 Boom .14 .46 Book Hint a. Calculate the expected return for the two stocks. (Do not round interme calculations and enter your answers as a percent rounded to 2 decimal places 32.16.) b. Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places 32.16.) Print a. Expected return of A Expected return of B b. Standard deviation of A Standard deviation of B Graw **. **** APR 08 F3 F1 F2
Research 3 stocks of your choice and answer the following questions. 1. What is the name of the stock? 2. What is the stock symbol? 3. What is its current price per share? 4. What was the 52 week high price for the stock? 5. What was the 52 week low price for the stock? 6. Why did you pick these stocks?
Assume these are the stock market and Treasury bill returns for a 5-year period: Year 2016 2017 2018 2019 2020 Stock Market Return (%) 33.30 13.20 -3.50 14.50 23.80 Required: a. What was the risk premium on common stock in each year? b. What was the average risk premium? c. What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.) 3 Required A Required B T-Bill Return Complete this question by entering your answers in the tabs below. Standard deviation (%) 0.12 0.12 0.12 0.07 0.09 x Answer is complete but not entirely correct. Required C What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.) Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. 13.69 X % घ

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