Give typing answer with explanation and conclusion An investor bought a stock for $17 (at t=0) and one year later it paid a $1 dividend (at t-1). Just after the dividend was paid, the stock price was $23 (at t=1).Inflation over the past year (from t=0 to t=1) was 10% pa, given as an effective annual rate. Which of the following statements is NOT correct? All answeroptions are rounded to 6 decimal places. The stock investment produced a:Select one:O a. Nominal capital return of 35.294118 % pa.O b. Nominal total return of 41.176471% pa.OC Real capital return of 22.994652% pa.Od. Real income return of 7.23498% pa.Oe. Real total return of 28.342246% pa.

Nominal rate does not exclude the impact of inflation but includes that, where the real return…

An investor bought a stock for $17 (at t-0) and one year later it paid a $1 dividend (at t=1). Just after the dividend was paid, the stock price was inflation over the past year (from t-o to t=1) was 10% pa, given as an effective annual rate. Which of the following statements is NOT correct? options are rounded to 6 decimal places. The stock investment produced a: Select one: O a Nominal capital return of 35.294118 % pa. Ob. Nominal total return of 41.176471% pa. Oc Real capital return of 22.994652% pa. Od. Real income return of 7.23498 % pa.

An investor bought a stock for $17 (at t-0) and one year later it paid a $1 dividend (at t=1). Just after the dividend was paid, the stock price was inflation over the past year (from t-o to t=1) was 10% pa, given as an effective annual rate. Which of the following statements is NOT correct? options are rounded to 6 decimal places. The stock investment produced a: Select one: O a Nominal capital return of 35.294118 % pa. Ob. Nominal total return of 41.176471% pa. Oc Real capital return of 22.994652% pa. Od. Real income return of 7.23498 % pa.

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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An investor bought a stock for $15 (at t=0) and one year later it paid a $1 dividend (at t=1). Just after the dividend was paid, the stock price was $7 (at t=1). Inflation over the past year (from t=0 to t=1) was -6% pa (note the negative sign), given as an effective annual rate. Which of the following statements is NOT correct? All answer options are rounded to 6 decimal places. The stock investment produced a: Question 2Select one: a. Nominal capital return of -46.666667% pa. b. Nominal total return of -46.666667% pa. c. Real capital return of -50.35461% pa. d. Real income return of 7.092199% pa. e. Real total return of -43.262411% pa.
An investor bought a stock for $19 (at t=0) and one year later it paid a $0 dividend (at t=1). Just after the dividend was paid, the stock price was $5 (at t=1). Inflation over the past year (from t=0 to t=1) was 6% pa, given as an effective annual rate. Which of the following statements is NOTcorrect? All answer options are rounded to 6 decimal places. The stock investment produced a: Question 1Select one: a. Nominal capital return of -73.684211% pa. b. Nominal total return of -73.684211% pa. c. Real capital return of -72.105263% pa. d. Real income return of 0% pa. e. Real total return of -75.173783% pa.
Suppose you invest $1,500 in an account paying 6% interest per year. How much of this balance corresponds to interest on interest earned in the last (7th) period? (Dollar figures should be approximated to the nearest cent of a dollar, while rates should be expressed in percentage terms without using the "%" symbol and approximated to the nearest second decimal place.)
Southern Markets recently paid an annual dividend of $1.17 on its common stock. This dividend increases at an average rate of 4.8 percent per year. The stock is currently selling for $20.40 a share. What is the market rate of return?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
An investor bought a stock for $18 (at t=0) and one year later it paid a $0 dividend (at t=1). Just after the dividend was paid, the stock price was $15 (at t=1). Inflation over the past year (from t=0 to t=1) was 6% pa, given as an effective annual rate. Which of the following statements is NOT correct? The stock investment produced a: Select one: a.Nominal capital return of -16.666667% pa. b.Nominal income return of -16.666667% pa. c.Real capital return of -21.383648% pa. d.Real income return of 0% pa. e.Real total return of -21.383648% pa.
The common stock of Dayton Repair sells for $41.95 a share. The stock is expected to pay $1.43 per share next year when the annual dividend is distributed. The company increases its dividends by 1.32 percent annually. What is the market rate of return on this stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Last year, Big W Company reported earnings per share of $3.50 when its stock was selling for $87.50. If its earnings this year increase by 10 percent and the P/E ratio remains constant, what will be the price of its stock? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Stock Price
Farley Inc. has perpetual preferred stock outstanding that sells for $44 a share and pays a dividend of $2.75 at the end of each year. What is the required rate of return? Round your answer to two decimal places. %
Meridian Manufacturing, Inc.'s stock has had the following annual returns over the past 5 years: +14.2%; -9.8%. +32.6%, -19.8%, and +27.9%. Using the proper method for calculating investment returns, what is the 5-year return on Meridian Manufacturing's stock? ROUND YOUR ANSWER TO ONE DECIMAL PLACE, AND DO NOT ENTER THE PERCENT SIGN (i.e. 10.5% should be entered as 10.5)
Dee's made two announcements concerning its common stock today. First, the company announced that the next annual dividend will be $1.87 a share. Secondly, all dividends after that will decrease by 1.91 percent annually. What is the value of this stock at a discount rate of 10.0 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Percentages need to be entered in decimal format, for instance 3% would be entered as .03.) Stock A and Stock B produced the returns shown on the spreadsheet during the past five years (Year -1 is one year ago, Year -2 is two years ago, and so forth). According to the spreadsheet, what is the average rate of return for each stock during the past five years? (Refer to Row 26 for average rate of return.) Based on the information in the spreadsheet, what is the coefficient of variation for each stock and for the portfolio? (Refer to Row 28 for the coefficient of variation.) If you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio? Why? Consider a third stock, Stock C, that is available for inclusion in the portfolio. Stock C produced the returns shown in the table during the past five years (add this to column D under Stock C). What is the average return, standard deviation, and coefficient of variation for Stock C? (Refer to Row 27 for…
You have found the following historical information for the Daniela Company: Stock price EPS Year 1 Year 2 Year 3 Year 4 $49.24 2.59 $67.43 $61.19 $67.07 2.65 2.82 2.81 Earnings are expected to grow at 8 percent for the next year. What is the PE ratio for each year? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Year 1 Year 2 Year 3 Year 4 What is the average PE ratio over this period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Average PE Using the company's historical average PE as a benchmark, what is the target stock price in one year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Target price

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