7 Mutual funds and individual stocks sometimes have graphs like the one shown below. AMZN (NASDAQ) February 12, 2012-February 12, 2013 299.31 272.39 24497 21755 1313 10271 $191.59 Aug 2012 Source: Microsoft Finance February 12, 2013. Markel data by Morningstar. +5.2012 OF 2012 $284.72 $257.21 a. How would you describe the pattern of change in the price of one share of Amazon.com stock over the one-year period shown? b. Estimate the equivalent simple annual interest rate earned on a share of Amazon stock purchased on February 12, 2012. c. Suppose you had purchased 100 shares of Amazon stock on February 12, 2012 and sold it at the highest value of the stock during the year that followed. What equivalent simple annual interest rate would you have earned? What would be the profit on your investment? S

7 Mutual funds and individual stocks sometimes have graphs like the one shown below. AMZN (NASDAQ) February 12, 2012-February 12, 2013 299.31 272.39 24497 21755 1313 10271 $191.59 Aug 2012 Source: Microsoft Finance February 12, 2013. Markel data by Morningstar. +5.2012 OF 2012 $284.72 $257.21 a. How would you describe the pattern of change in the price of one share of Amazon.com stock over the one-year period shown? b. Estimate the equivalent simple annual interest rate earned on a share of Amazon stock purchased on February 12, 2012. c. Suppose you had purchased 100 shares of Amazon stock on February 12, 2012 and sold it at the highest value of the stock during the year that followed. What equivalent simple annual interest rate would you have earned? What would be the profit on your investment? S

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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You are given the following information concerning several mutual funds: Fund Return in Excess of the Treasury Bill Rate Beta A 12.4% 1.14 B 13.2% 1.22 C 11.4% 0.90 D 9.8% 0.76 E 12.6% 0.95 During the time period, the Standard & Poor's stock index exceeded the Treasury bill rate by 10.5 percent (i.e., r(m) - r(f) = 10.5%) a. Rank the performance of each fund without adjusting for risk and adjusting for risk using the Treynor index. Which, if any, outperformed the market? (Remember, the beta of the market is 1.0.) b. The analysis in part (a) assumes each fund is sufficiently diversified so that the appropriate measure of risk is the beta coefficient. Suppose,…
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Investing: Inverse ETFS (Exchange Traded Funds) Inverse ETFS, sometimes referred to as "bear market" or "short" funds, are designed to deliver the opposite of the performance of the index or category they track, and so can be used by traders to bet against the stock market. The following table shows the performance of three such funds as of August 5, 2015.t Year-to-Date Loss (%) MYY (ProShares Short Midcap 400) SH (ProShares Short S&P 500) REW (ProShares UltraShort Technology) 7 You invested a total of $12,000 in the three funds at the beginning of 2011, including an egual amount in SH and REW. Your year-to-date loss from the first two funds amounted to $510. How much did you invest in each of the three funds? MYY $ SH 2$ REW $
the following information is provided for the stock market: Expected Beta Return Alphabet 12.5% 1.5 Meta 9% 1 Yahoo ? 1.35 (a) (10 points) In the context of CAPM, calculate the expected return of Yahoo
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.
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Given the following stock quotation, find the highest price during the last year. (Refer to Exhibit 20–3.) Pfizer PFE 15.52 16.22 15.67 15.83 0.50 3.26 38,228,171 19.95 13.72 0.73 4.61 14.8 −12.00 A. $15.83 B. $16.22 C. $19.95 D. $38.23
Use the data below to construct the advance or decline line and Arms ratio for the market. Volume is in thousands of shares. Note: Input all amounts as positive values. Do not round intermediate calculations. Round your "Arms Ratio" answers to 3 decimal places. Stocks Advancing. 1,903 Monday Tuesday 2,601 Wednesday 1,699 2,204 Thursday Friday 1,901 Monday Tuesday Wednesday Thursday Friday Advancing Volume 948,321 784,531 517,757 931,460 593,799 Advance or Decline Stocks Declining 632 699 1,371 829 1,194 Cumulative Declining Volume 68,252 214,915 498,712 313,713 383,328 Arms Ratio
The table shows the average returns and betas for the five ETFs, S&P 500, and Treasury. VONF IJT PDP FTA FNY S&P 500 TreasuryAnnualize mean 0.07148 0.11941 0.09613 0.07483 0.10233 0.09637 0.02541Beta 1.01106 1.11377 1.01507 1.02652 1.09928 1.00000 0.00000 Create a SML with the S&P 500 index's and the Treasury's average returns and betas. Determine whether the ETFs have return and beta combinations above or below the line you generated. Explain the arbitrage strategy you would form with one of the ETFs, index, or Treasury.
Please complete in Excel (and show work): If returns of S&P 500 stocks are normally distributed, what range of returns would you expect to see 95% of the time? Base your answer on Figures 11.3 (left) and 11.4 (right).
Qd 42.

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