A stock has the following prices at the end of each of the following 5 years. What is the geometric average return over the period? Year 20x1 20x2 20x3 20x4 20x5 a. 147% b. 117% x c. 2.26% d. 194% Price $2.17 $2.19 $212 $2.51 $2.3

A stock has the following prices at the end of each of the following 5 years. What is the geometric average return over the period? Year 20x1 20x2 20x3 20x4 20x5 a. 147% b. 117% x c. 2.26% d. 194% Price $2.17 $2.19 $212 $2.51 $2.3

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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Historical Realized Rates of Return Stocks A and B have the following historical returns: Year 2012 -15.10% -14.90% 2013 21.50 27.00 2014 12.50 31.60 2015 -4.00 -6.10 2016 29.25 6.55 Calculate the average rate of return for each stock during the 5-year period. Round your answers to two decimal places. Stock A % Stock B % Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? Round your answers to two decimal places. Year Portfolio 2012 % 2013 % 2014 % 2015 % 2016 % Average return % Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. rA rB Portfolio Std. Dev. % % % If you are a risk-averse investor then, assuming these are your only choices, would you prefer…
Bhupatbhai
Consider the following returns of Stock 1 and Stock 2: Stock 1 Stock 2 Realized Realized Year End Return Return 2004 20.1% -14.6% 2005 72.7% 4.3% 2006 -25.7% -58.1% 2007 56.9% 71.1% 2008 6.7% 17.3% 2009 17.9% 0.9% Suppose you have a portfolio that is made up of 70% investments in Stock 1 and 30% investments in Stock 2. Compute: 1) Average annual return of the portfolio from 2004 to 2009; 2) Variance of the portfolio; 3) Standard deviation of the portfolio.
Solve for the stock price, P0, using the following information: D1: $3.31 D2: $3.94 D3: $4.76 D4: $5.17 After year 4, dividends will grow at a constant 4% per year. The required return on the stock, rS, is 12% per year.
How do i start this question? Ford stock produced the following monthly returns (January - May): 1%, 10%, 6%, 3%, and 2%. I) Calculate the average return for each stock. II) Calculate the standard deviation of monthly return for each stock.
QUESTION 1 You have observed a particular stock over the past year. Monthly returns have been as follows: -7%, -7%, 11%, -8%, 0%, 2%, 2%, -5%, -1%, -2%, -4%, 11%. Using Excel, calculate the average monthly returns to the nearest hundredth of a percent (.01). The average function is =average(). QUESTION 2 You have observed a particular stock over the past year. Monthly returns have been as follows: 1%, -6%, 9%, -7%, 12%, -4% , -9%, -1%, 11%, 2%, -6%, -11%. Using Excel, calculate the standard deviation. For the standard deviation of a sample, use =stdev.s(). 7.886986 8.005207 6.680478 6.939129
The historical returns for the past three years for Stock B and the stock market portfolio are Stock B: 24 percent, 0 percent, 24 percent; market portfolio: 10 percent, 12 percent, 20 percent. Calculate the beta for Stock B. 1 1.17 1.13 0.86
A stock had the following year-end prices and dividends: Year 0 1 23 Multiple Choice O Price $ 60.55 72.46 62.98 73.50 What was the arithmetic average return for the stock? O O 12.61% 10.09% Dividend 9.02% $ 1.29 1.63 1.64
A stock had returns of 15 percent, 20 percent, 11 percent, 5 percent, 11 percent, and -7 percent over the last six years. What is the arithmetic return for the stock? Arithmetic return What is the geometric return for the stock? Geometric return
Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market Return (%) T-Bill Return (%) 2016 13.0 0.2 2017 21.0 0.8 2018 -6.2 1.8 2019 29.8 2.1 2020 20.6 0.4 Required: What was the risk premium on common stock in each year? What was the average risk premium? What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.)-- expressed in % (NOTE: 11.31% is incorrect)
1. A stock price is currently $50 and it follows geometric Brownian motion with an expected return of 10% and volatility of 25% per year. The probability that the stock price at the end of 9 months will be greater than or equal to $60 is closest to: a. 0.6037 b. 0.2245 c. 0.2730 d. 0.7755
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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