(Calculating rates of return) The S&P stock index represents a portfolio comprised of 500 large publicly traded companies. On December 24, 2007, the index had a value of 1,410 and on December 24, 2008, the index was approximately 864. If the average dividend paid on the stocks in the index is approximately 3.0 percent of the value of the index at the beginning of the year, what is the rate of return earned on the S&P index? What is your assessment of the relative riskiness of investing in a single stock such as Google compared to investing in the S&P index (recall from Chapter 2 that you can purchase mutual funds that mimic the returns of the index)? The rate of return earned on the S&P 500 is %. (Round to two decimal places.) What is your assessment of the relative riskiness of investing in a single stock, such as Google, compared to investing in the S&P index? (Select the best choice below.) ○ A. In general, investing in a single stock has the same relative riskiness as investing in the S&P index. ○ B. There is not enough information given to answer this question. ○ C. In general, investing in a single stock is riskier than investing in the S&P index. ○ D. In general, investing in the S&P index is riskier than investing in a single stock.
(Calculating rates of return) The S&P stock index represents a portfolio comprised of 500 large publicly traded companies. On December 24, 2007, the index had a value of 1,410 and on December 24, 2008, the index was approximately 864. If the average dividend paid on the stocks in the index is approximately 3.0 percent of the value of the index at the beginning of the year, what is the rate of return earned on the S&P index? What is your assessment of the relative riskiness of investing in a single stock such as Google compared to investing in the S&P index (recall from Chapter 2 that you can purchase mutual funds that mimic the returns of the index)? The rate of return earned on the S&P 500 is %. (Round to two decimal places.) What is your assessment of the relative riskiness of investing in a single stock, such as Google, compared to investing in the S&P index? (Select the best choice below.) ○ A. In general, investing in a single stock has the same relative riskiness as investing in the S&P index. ○ B. There is not enough information given to answer this question. ○ C. In general, investing in a single stock is riskier than investing in the S&P index. ○ D. In general, investing in the S&P index is riskier than investing in a single stock.
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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UNIT 7-2
Transcribed Image Text:(Calculating rates of return) The S&P stock index represents a portfolio comprised of 500 large publicly traded companies. On December 24, 2007, the index had a value of 1,410
and on December 24, 2008, the index was approximately 864. If the average dividend paid on the stocks in the index is approximately 3.0 percent of the value of the index at the
beginning of the year, what is the rate of return earned on the S&P index? What is your assessment of the relative riskiness of investing in a single stock such as Google compared to
investing in the S&P index (recall from Chapter 2 that you can purchase mutual funds that mimic the returns of the index)?
The rate of return earned on the S&P 500 is %. (Round to two decimal places.)
What is your assessment of the relative riskiness of investing in a single stock, such as Google, compared to investing in the S&P index? (Select the best choice below.)
○ A. In general, investing in a single stock has the same relative riskiness as investing in the S&P index.
○ B. There is not enough information given to answer this question.
○ C. In general, investing in a single stock is riskier than investing in the S&P index.
○ D. In general, investing in the S&P index is riskier than investing in a single stock.
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