As an analyst at an investment bank, you are asked to compare the monthly returns of the two stocks Tesla and Apple Inc during the period of August 2020 to March 2021: Tesla, Xi Aug Sep Oct Nov Dec Jan Feb Mar 0.038 0.199 0.187 -0.069 0.481 0.392 -0.039 -0.150 Apple Inc, y: 0.184 -0.010 0.111 -0.042 0.027 0.052 0.051 -0.106 Σx₁ = 1.039 Σ(x-x)² = 0.3549 Σχ Σy = 0.267 Σ(y: - y)2 = 0.0564

As an analyst at an investment bank, you are asked to compare the monthly returns of the two stocks Tesla and Apple Inc during the period of August 2020 to March 2021: Tesla, Xi Aug Sep Oct Nov Dec Jan Feb Mar 0.038 0.199 0.187 -0.069 0.481 0.392 -0.039 -0.150 Apple Inc, y: 0.184 -0.010 0.111 -0.042 0.027 0.052 0.051 -0.106 Σx₁ = 1.039 Σ(x-x)² = 0.3549 Σχ Σy = 0.267 Σ(y: - y)2 = 0.0564

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 considering an investment in either individual stocks or a portfolio of stocks. The two stocks you are researching, Stock A and Stock B, have the following historical returns: Year TA TB 2017 -17.00% -8.00% 2018 34.00 14.00 2019 29.00 -18.00 2020 -5.00 55.00 2021 21.00 19.00 a. Calculate the average rate of return for each stock during the 5-year period. Do not round intermediate calculations. Round your answers to two decimal places. Stock A: 12.40 % Stock B: 12.40 b. Suppose you had 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? Do not round intermediate calculations. Round your answers to two decimal places. Negative values, if any, should be indicated by a minus sign.
Stocks A and B have the following historical returns:YearStock A's Returns, raStock B's Returns, ra2016(18.60%)(14.50%)201734.2520.40201814.7539.902019(1.00)(9.70)202026.7520.05a. Calculate the average rate of return for each stock during the period 2016 through 2020. Round your answers to two decimal places.Stock A:11.23%Stock B:11.23%b. Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would the realized rate of return on the portfolio have been each year? Round your answers to two decimal places. Negative values should be indicated by a minus sign.YearPortfolio2016-16.55%201727.33201827.33%2019-5.35202023.40What would the average return on the portfolio have been during this period? Round your answer to two decimal places.11.23c. Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places.Stock AStock BPortfolioStandard Deviationd. Calculate the coefficient of variation for each…
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.
The following are the end-of-month prices for both the Standard & Poor's 500 Index and Nike's common stock. a. Using the data in the popup window, calculate the holding-period returns for each of the months. b. Calculate the average monthly return and the standard deviation for both the S&P 500 and Nike. c. Develop a graph that shows the relationship between the Nike stock returns and the S&P 500 Index. (Show the Nike returns on the vertical axis and the S&P 500 Index returns on the horizontal axis.) d. From your graph, describe the nature of the relationship between Nike stock returns and the returns for the S&P 500 Index.
Historical Realized Rates of Return You are considering an investment in either individual stocks or a portíolio of stocks. The two stocks you are researching, Stock A and Stock B, have the folloving historical retums: Year 2015 -22.00% -4.00% 2016 34.00 17.00 2017 29.00 -15.00 2018 -2.00 46.00 2019 30.00 25.00 a. Calculate the average rate of return for each stock during the 5-year period. Do not round intermediate calculations. Round your ansvers to two decimal places. Stock A: Stock 8: b. Suppose you had 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? Do not round intermediate calculations. Round your ansviers to bwo decimal places. Negative values, if any, should be indicated by a minus sign. Year Portfolio 2015 2016 2017 2018 2019 Average return c. Calculate the standard deviation of returns for each stock…
Show the monthly return of the company and S&P 500 in the same graph. What is your interruption interpretation of the change of return of the company comparing with the market index? Calculate the monthly standard deviation and return for both the company and S&P 500. What is your interruption of the risk and return of the company comparing with the market index? S&P 500 last 6 months : Date Open High Low Close* Adj. close** Volume 01 Apr 2022 4,540.32 4,593.45 4,381.34 4,392.59 4,392.59 37,024,560,000 01 Mar 2022 4,363.14 4,637.30 4,157.87 4,530.41 4,530.41 100,978,320,000 01 Feb 2022 4,519.57 4,595.31 4,114.65 4,373.94 4,373.94 73,167,790,000 01 Jan 2022 4,778.14 4,818.62 4,222.62 4,515.55 4,515.55 73,279,440,000 01 Dec 2021 4,602.82 4,808.93 4,495.12 4,766.18 4,766.18 68,699,830,000…
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)
Assume that in 2020, a Liberty Seated half dollar issued in 1891 was sold for $209,000. What was the rate of return on this investment? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Fill in the missing information in the following table. Assume that Portfolio AB is 40 percent invested in Stock A. (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Year 2015 2016 2017 2018 2019 Average return Standard deviation Answer is complete but not entirely correct. Annual Returns on Stocks A and B Stock A Stock B 19.0 -32.0 42.0 18.0 30.0 15.40 56.45 11.0 33.0 -13.0 24.0 17.0 14.40 34.74 % % % % % % % % % % % % % % Portfolio AB 15.80 -6.00 20.00 20.40 24.80 15.00 24.32 % % % % % % %
The following table indicates yearly returns for different asset classes in the past 10 years. Estimate the beta for the Nike stock. Note: Please write your answer in decimal form up to two decimal places. Nike Return Market Return Risk Free Rate 0.1 0.08 0.02 -0.1 -0.076 0.02 0.15 0.1 0.02 0.025 0.04 0.02 0.02 0.01 0.02 -0.12 -0.1 0.02 0.2 0.015 0.02 -0.03 -0.02 0.02 -0.3 -0.2 0.02 0.12 0.09 0.02
Please answer Question 8 & 9 8.On March 24, 2020, the Dow Jones Industrial Average opened at $18,591.93 and closed at $20,704.91. What was the daily return that day, and what was the effective annual rate return (in percent) of the stock market that day?Daily Return: __________% EAR:_________ % 9. Financial analysts forecast GDY Inc.’s growth for the future to be 8%. GDY's recent annual dividend was $6.00. What is the value of GDY stock when the required return is 11%?Stock Value: $___________________
Stocks A and B have the following historical returns: a. Calculate the average rate of return for each stock during the period 2013 through2017.b. Assume that someone held a portfolio consisting of 50% of Stock A and 50% ofStock B. What would the realized rate of return on the portfolio have been eachyear? What would the average return on the portfolio have been during thisperiod?c. Calculate the standard deviation of returns for each stock and for the portfolio.d. Calculate the coefficient of variation for each stock and for the portfolio.e. Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, orthe portfolio? Why?

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