Consider the following returns for two investments, A and B. over the past four years:Investment 1:Investment 21a-1. Calculate the mean for each investment. (Round your answers to 2 decimal places.)Investment 1Investment 2Investment 1O Investment 26%a-2. Which investment provides the higher return?Investment 1Investment 2Meanb-1. Calculate the standard deviation for each investment. (Round your answers to 2 decimal places.)Investment 1Investment 296%Investment 1Investment 2Standard Deviationb-2. Which investment provides less risk?5165.7.5c-1. Given a risk-free rate of 1.2%, calculate the Sharpe ratio for each investment. (Round your answers to 2 decimal places.Sharpe Ratio

Before computing the Sharpe ratio, it is essential to calculate both the mean (which provides the…

Consider the following returns for two investments. A and B, over the past four years: Investment 1: Investment 2: Investment 1 Investment 2 Investment 1 Investment 2 a-1. Calculate the mean for each investment. (Round your answers to 2 decimal places.) 2% 6% Investment 1 Investment 2 8% 12% Mean a-2. Which investment provides the higher return? Investment 1 Investment 2 Investment 1 Investment 2 % % b-1. Calculate the standard deviation for each investment. (Round your answers to 2 decimal places.) Standard Deviation -4% -8% 196 b-2. Which investment provides less risk? Sharpe Ratio 10% 96 c-1. Given a risk-free rate of 1.2%, calculate the Sharpe ratio for each investment. (Round your answers to 2 decimal pl

Consider the following returns for two investments. A and B, over the past four years: Investment 1: Investment 2: Investment 1 Investment 2 Investment 1 Investment 2 a-1. Calculate the mean for each investment. (Round your answers to 2 decimal places.) 2% 6% Investment 1 Investment 2 8% 12% Mean a-2. Which investment provides the higher return? Investment 1 Investment 2 Investment 1 Investment 2 % % b-1. Calculate the standard deviation for each investment. (Round your answers to 2 decimal places.) Standard Deviation -4% -8% 196 b-2. Which investment provides less risk? Sharpe Ratio 10% 96 c-1. Given a risk-free rate of 1.2%, calculate the Sharpe ratio for each investment. (Round your answers to 2 decimal pl

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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1. Suppose $1000 is invested at the end of each year. Assume the investments earn 10% compounded annually. Calculate the future value of the investments after each of the following number of years. a. 10 b. 20 c. 30
1) The simple interest for an investment is jointly proportional to the time and the principal. After one quarter (3 months), the interest on a principal of $5000 is $43.75 a) Write an equation relating the interest ,principal and time b) Find the interest after three quarters 2) The Kinetic energy E of an object varies jointly with the object mass m and the square of the object velocity v .An object with a mass of 50 kilograms traveling at 16 meters per second has a kinetic energy of 6400 joules . a) Write an equation relating the interest ,principal and time b) What is the kinetic energy of an object with a mass of 70 kilograms traveling at 20 meters per second?
6.A young person with no initial capital invests k dollars per year at an annual rate of return r. Assume that investments are made continuously and that the return is compounded continuously. a.Determine the sum S(t) accumulated at any time t.
Using Table 11-1, compute the amount of compound interest (in $) earned in 1 year and the annual percentage yield (APY) for the investment. (Round your answers to two decimal places.) Compound Interest Earned in 1 Year Annual Percentage Yield (APY) Nominal Interest Principal Rate (%) Compounded $33,000 12 monthly $ % Need Help? Read It 3 Type here to search
Consider the following asset with it's returns over the last 3 years. The arithmetic mean is 8% 1yr 2yr 3yr 8% 4% 6% What is the geometric mean? (Be sure to go out at least 4 decimal places.) Respuesta:
Assume that at the beginning of the year, you purchase an investment for $6,500 that pays $95 annual income. Also assume the investment's value has increased to $7,050 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.
What is the IRR for a $1,075 investment that returns $190 at the end of each of the next 6 years?(Perform all calculations using 5 significant figures and round your answer to two decimal places): Answer: ____________%
You plan to invest in an account which pays 4% compounded continuously. If the investment period is for 7 years, then A(P) = Pe0.04-7-Pe028 gives the total balance of P dollars. a Find a formula for A'(P) Find and interpret A'(8000) b. c. Compare the approximation to the actual change..
Returns of a Single Asset. Suppose you have invested in 2 assets whose annual returns are shown in the following table. If you invest $1000 in each asset: What will be the value of each asset at the end of year 5? What is the single annual rate which would yield the same value at the end of year 5? (meaning, what is the geometric average annual rate of return?) Year Asset A Asset B 1 -6.01% -9.98% 2 -10.27% 12.30% 3 13.75% 18.15% 4 24.31% -1.69% 5 20.88% 5.00% please use excel
P 9-1 Investment Scenarios (LO 9-3) Arkansas Best Freightways is considering a purchase of three different potential trucks. it is considering three different investment scenarios and their respective cash flows. Arkansas Best Freightways use a cost of capital of 9 percent to evaluate the investments. Year Year 0 (today) Year 1 Year 2 Year 3 Year 4 Buy new truck Increased profits Increased profits Increased profits Increased profits Net cash flows over life (not discounted) Investment 1 (85,000) 25,000 25,000 25,000 25,000 $ Investment 2 (105,000) 20,000 30,000 40,000 50,000 Required: 1. Calculate the net cash flows (not discounted) over the life of the three investments (years 0 to 4). (Negative amounts should be entered using a minus sign.) Answer is complete and correct. Investment 1 15,000 Investment 2 $ Investment 3 (125,000) 40,000 30,000 20,000 10,000 Investment 3 (25,000) 35,000 S Cost of Capital 9%
The past five monthly returns for Kohls are 3.80 percent, 4.27 percent, -1.94 percent, 9.38 percent, and -2.82 percent. What is the average monthly return? Note: Round your answer to 3 decimal places. Average return I%

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