Check my workProblem 5-16 Value-Weighted Indexes (LO4, CFA2)The following three defense stocks are to be combined into a stock index in January 2022 (perhaps a portfolio manager believesthese stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, ifthe total value of all firms in the market is $5 billion, the index would be quoted as 500.Douglas McDonnellDynamics GeneralInternational RockwellShares (millions)1/1/22Price1/1/231/1/24535450230$ 897099$ 946588$ 10979105a. Calculate the initial value of the index if a value-weighting scheme is used.Note: Round your answer to 2 decimal places.Index valueb. What is the rate of return on this index for the year ending December 31, 2022? For the year ending December 31, 2023?Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as apercent rounded to 2 decimal places.2022 return2023 return%%

Part (a): Calculate the initial value of the indexTo calculate the initial value of the…

Answered: Check my work Problem 5-16…

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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Consider 2 stocks in the following table. We create a stock index of companies that make stuff for Spring Break. stocks PO Q0 P1 Q1 ABC, Inc. $850P0 150Q0 $ 830P1 150Q1 XYZ, Inc. $510P0 400Q0 $550P1 400Q1 What is the initial portfolio weight for stock ABC in a Price - weighted index of these two stocks
Review the following market information: Current Stock Market Return 11.25% Current T-Bill Price $979.43 Historic T-Bill Average Return 2.80% Historic Stock Market Average Return 8.10% Stock Beta 1.23 What is the required return (rounded to two places)?
The Bloomberg screen below shows the Nasdaq Index price over the last year. Describe the technical indicator used from the chartist and what trade signal it may suggest. CCMP €T On 03 CCMP Index 11/04/2020 Study RSI 1D 3D 1M 6M YTD 1Y 5Y Max Daily Volume 1.000B IRSI (14) on Close (CCMP) 75.3572 Nov C 15811.58 +161.98 Nov 0 15658.52 H 15821.58 L 15616.44 Prev 15811.58 94) Suggested Charts 96) Actions 97) Edit 11/04/2021 Last Px Local CCY Mov Avgs Period 14 Overbought 70 Oversold 30 1 Table + Compare ▾ Add Data Track Annotate News Zoom Key Events 2020 Dec Jan Feb Mar Apr May Jun 06/03/21 Jul Aug Relative Strength Index ไปได้ Sep Edit Chart * Oct 15811.5801 15013.0596 14198.1699 Last Price THigh on 11/03/21 Average 15811.5801 15821.5801 12000 13839.5049 Z-VOU 1 Low on 11/04/20 11394.21 11075.4473 ISMAVG (50) on Close 15013.0596 SMAVG (100) on Close 14805.082 SMAVG (200) on Close 14198.1699 13000 10000 3B 2B 1.000B -0 100 75.3572 -50 -0
The value of the shares in the S&P 500 index is $12,270B. Apple Inc. is the largest company in the index-it is worth $552.158. If you want to build a portfolio that earns the same return as the S&P 500, what is the portfolio weight on Apple? O 4.5% O 3.5% O 5.5% O 6.5%
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). Suppose that Douglas McDonnell shareholders approve a 2-for-1 stock split on January 1, 2020. Douglas McDonnell Dynamics General International Rockwell New divisor Shares (millions) 180 325 370 Rate of return 1/1/19 $ 60 68 97 Price 1/1/20 $ 64 64 86 a. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimal places.) 1/1/21 $77 78 100 b. Calculate the rate of return on the index for the year ending December 31, 2020, if Douglas McDonnell's share price on January 1, 2021, is $23.42 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Question 14?
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Consider 2 stocks in the following table. We create a stock index of companies that make stuff for Spring Break. stocks PO Q0 P1 Q1 ABC, Inc. $ 370p0 1200q0 $400p1 1200q1 XYZ, Inc. $650p0 250q0 $620p 1 250q1 What is the return on a equal - weighted index of these two stocks in percent to 2 decimal places
Problem 20-17 (Algo) The following is part of the computer output from a regression of monthly returns on Waterworks stock against the S&P 500 Index. A hedge fund manager believes that Waterworks is underpriced, with an alpha of 1% over the coming month. Beta 0.60 R-square 0.65 Required: a. Suppose you hold an equally weighted portfolio of 100 stocks with the same alpha, beta, and residual standard deviation as Waterworks. Assume the residual returns (the e terms in Equations 20.1 and 20.2) on each of these stocks are independent of each other. What is the residual standard deviation of the portfolio? (Round your percentage answer to 2 decimal places.) Residual standard deviation Standard Deviation of Residuals 0.06 (1.e., 6% monthly) Probability of a loss b. Recalculate the probability of a loss on a market-neutral strategy involving equally weighted, market-hedged positions in the 100 stocks over the next month. Assume the risk-free rate is 1.3% per month. (Do not round intermediate…
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The Bloomberg screen below shows the Nasdaq Index price over the last year. Describe the technical indicator used from the chartist and what trade signal it may suggest. CCMP €T On 03 CCMP Index 11/04/2020 Study RSI 1D 3D 1M 6M YTD 1Y 5Y Max Daily Volume 1.000B IRSI (14) on Close (CCMP) 75.3572 Nov C 15811.58 +161.98 Nov 0 15658.52 H 15821.58 L 15616.44 Prev 15811.58 94) Suggested Charts 96) Actions 97) Edit 11/04/2021 Last Px Local CCY Mov Avgs Period 14 Overbought 70 Oversold 30 1 Table + Compare ▾ Add Data Track Annotate News Zoom Key Events 2020 Dec Jan Feb Mar Apr May Jun 06/03/21 Jul Aug Relative Strength Index ไปได้ Sep Edit Chart * Oct 15811.5801 15013.0596 14198.1699 Last Price THigh on 11/03/21 Average 15811.5801 15821.5801 12000 13839.5049 Z-VOU 1 Low on 11/04/20 11394.21 11075.4473 ISMAVG (50) on Close 15013.0596 SMAVG (100) on Close 14805.082 SMAVG (200) on Close 14198.1699 13000 10000 3B 2B 1.000B -0 100 75.3572 -50 -0

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