30.Questions 30 and 31 are related.Use the following information regarding an equal-weighted equity index and assume that all dividendpayments are made at the end of the year and are reinvested in the stock that paid the dividend.Security Price at the End of 2021 Price at the End of 2022 Dividends per ShareA$26$0.50B$45$0.20C$36$0.40Ꭰ$135$0.50Note: The dollar value of the index on December 31, 2021 is $10,000 and using a divisor of 100, the index levelequals 100.a.b.C.31.a.b.C.The weight of Security B in the index on December 31, 2022 with dividends reinvested and before rebalancingis closest to:16.75%18.55%19.24%$25$50$31.25$1007.35%7.87%The total return on the index referenced in the previous question for the year 2022 is closest to:8.90%d. 22.16%e. 23.33%f. 25.00%d. 10.53%e. 12.10%f. 12.54%

A dividend is a payment made to shareholders by a company in the form of cash or extra stock. As…

Answered: a. b. C. 31. a. b. c. The weight of…

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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11. An announcement by Kodak that ts eamings are going to be negative for the year would likely cause an increase in which of the following? O a. The liquidity risk premium O b. The default risk premium O ¢ The inflation risk premium o
Q15
Manshuk
vi.3
d. How would you characterize the correlation of returns of the two stocks L and M? Year 2016 2017 2018 2019 2020 2021 "L 14% 14% 16% 17% 17% 19% ™M 20% 18% 16% 14% 12% 10% Correlation coefficient, PLM
QUESTION 1 Consider the following information on stocks I and II: State of probability of Rate of Return if state Occurs state of Econ. Stock I Stock II 0.20 0.06 0.55 0.47 0.25 0.23 The market risk premium is 8%, and the risk free rate is 6%. Economy Recession Normal Boom a) Which stock has the most Systematic risk? b) Which one has the most unsystematic risk? c) Which stock is "riskier"? Explain. -0.25 0.11 0.68
Vijay
Question four Risk is usually measured in terms of the volatility in the historical returns generated by shares. Is this a good indicator of future risks in fast changing sectors? What implications does this have for the analysis of risk? Question five Explain briefly what beta (the relative risk) measures. Is this the only type of risk that a fim faces? Question six (a) Stocks A and market have the following estimated returns: RA RM year 2018 -18% -24% 2019 44% 24% 2020 -22% -4% 2021 22% 8% 2022 34% 56% Required to )Calculate the expected rate of return for stock A and Market đuring the 5-year period. (ii) Now calculate the total risk of stock A and Market (b)The market M and Stock J have the following probability distributions: State of the economy Probability RM RJ Вoom 0.3 15% 20% Depression Recovery 0.4 9% 5% 0.3 18% 12% Required to (1) Calculate the expected rates of retum for the market and Stock J. (ii) Calculate the standard deviations for the market and Stock J.
Question 06 From the following information Calculate Beta for the company ABCD Year 2015 2016 2017 2018 2019 2020 Market Return 7 9 7 -12 -7 15 ABC Stock Returns -8 -10 -9 14 10 13 Note: You may use MS. EXCEL to calculate the covariance and standard deviation. The formula to calculate Beta for stock i is as follows
View Policies Current Attempt in Progress Calculate the correlation coefficient (PA) for the following situation: (Round intermediate calculations and the final answer to 4 decimal place, e.g. 0.2921.) State of the economy High growth Moderate Recession Probability of Expected return on occurrence stock A in this state 47.0% 26.0% -14.0% 25% 20% 55% Correlation coefficient Expected return on stock B in this state 64.0% 34.0% -24.0%
Q2 - Returns on stocks X and Y are listed below: Period 1 2 3 4 5 6 7Stock X 4% -2% 5% -1% 10% 7% 12%Stock Y -3% 7% 4% 2% 2% 8% -3% Consider a portfolio of 10% stock X and 90% stock Y. What is the mean of portfolio returns? Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).
k ces an equally weighted index is one in which the index value is computed from the average rate of return of the stocks comprising the index. Equally weighted indexes are frequently used by financial researchers to measure portfolio performance. The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Douglas McDonnell Dynamics General International Rockwell Index return Shares (millions) 425 530 310 % 1/1/19 $ 72 50 79 Price 1/1/20 $ 75 43 68 a. Compute the rate of return on an equally weighted index of the three defense stocks for the year ending December 31, 2019. (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) 1/1/21 $ 92 57 85 b. If the index value is set to 100 on January 1, 2019, what will the index value be on January 1, 2020? (Do…

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