A B C Po 91 ¹ 51 102 Rate of return 90 100 200 200 P1 96 46 112 Rate of return Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted index 3.78 % b. An equally weighted index Q1 100 200 200 % P2 96 46 56 92 100 200
A B C Po 91 ¹ 51 102 Rate of return 90 100 200 200 P1 96 46 112 Rate of return Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted index 3.78 % b. An equally weighted index Q1 100 200 200 % P2 96 46 56 92 100 200
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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Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Question
Transcribed Image Text:А
ABC
Po
91
51
102
Rate of return
Q0
100
200
200
P1
96
46
112
Rate of return
3.78 %
b. An equally weighted index
Required:
Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round intermediate calculations. Round
your answers to 2 decimal places.)
a. A market value-weighted index
91
100
200
200
%
P2
96
46
56
92
100
200
400
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