(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 921. If the average dividend paid on the stocks in the index is approximately 4.0 percent of the value of the index at the beginning of the year, what is the rate of retum eamed 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)? KIYD The rate of return earned on the S&P 500 is % (Round to two decimal places.)

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
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(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 921. If the average dividend paid on the stocks in the index is approximately 4.0 percent of the
value of the index at the beginning of the year, what is the rate of retum eamed 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)?
KIYD
The rate of return earned on the S&P 500 is % (Round to two decimal places.)
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 921. If the average dividend paid on the stocks in the index is approximately 4.0 percent of the value of the index at the beginning of the year, what is the rate of retum eamed 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)? KIYD The rate of return earned on the S&P 500 is % (Round to two decimal places.)
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