Consider the three stocks in the following table. Pt represents price at time t, and Ot represents shares outstanding at time t. Stock C splits two-for-one in the last period. Pe 00 P1 01 P2 02 91 100 96 100 96 100 51 200 46 200 46 200 с 102 200 112 200 56 400 Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted index Rate of return % b. An equally weighted index Rate of return ABC %

Consider the three stocks in the following table. Pt represents price at time t, and Ot represents shares outstanding at time t. Stock C splits two-for-one in the last period. Pe 00 P1 01 P2 02 91 100 96 100 96 100 51 200 46 200 46 200 с 102 200 112 200 56 400 Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted index Rate of return % b. An equally weighted index Rate of return ABC %

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 the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. A B C Ро 90 50 100 Rate of return 90 100 200 200 P1 95 45 110 Rate of return b. An equally weighted index Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round intermediate calculations. Round answers to 2 decimal places.) a. A market value-weighted index % 01 100 200 200 % P2 95 45 55 92 100 200 400
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2. The following table shows the constituent stocks of a hypothetical index. Stock B splits two-for-one during the period. Stock A B C Beginning of Period Price ($) Shares 30 75 36 2,000 500 1,200 End of Period Price ($) 26 40 32 Shares 2,000 1,000 1,200 a. Calculate the returns on both the price-weighted index and the market value- weighted index of three stocks over the period. b. If you just buy 5,000 shares of stock C for $36, hold for 1 year, collect $8 dividend and sell it at $32. Calculate your total return.
Scenario 2: The following table shows the returns for the market index (Market - M) and the returns for two stocks (Asset X & Y) under three scenarios. Assume each scenario has an equal chance of occurring (33%). Bad Okay Good Market - M-5% 5% 15% Asset - X -2%-3% 25% Asset - Y -4%-6% 30% What is the correlation of "Asset - Y" to "Market M"? enter your number to two decimal places without the percent sign. Example 23% enter as .23.
There are three stocks in the index alpha, beta, and gamma. The stocks sell for $102 $345 and $87 respectively. If beta undergoes a 3 for 1 stock split, what is the new divisor for the price weighted index? (a) 2.34 (b) 7.81 (c) 1.71 (d) 2.07
Suppose you are given the following information about 2 stocks, what is the Sharpe Ratio of a portfolio weighted 55% in stock A and 45% in stock B? E(RA)=16% E(RB)=8% σA=22% σB=12% σA,B=−0.003696 rf=3% Enter rate in decimal form, rounded to 4th digit, as in "0.1234"
Consider three stocks, X, Y, and Z, in the following table. P0, P1, and P2 represent prices at time 0, 1, and 2. Q0, Q1, and Q2 represent shares outstanding. Stock Z splits two for one in the last period. Stocks PO Q0 P1 Q1 P2 Q2 ? X 90 100 95 100 95 100 Y 50 200 60 200 45 200 Z 100 200 110 200 55 400 Using the above information to compute an equally weighted average returns in the three stocks from periods 1 to 2 0% O-1.85% -8.33% -25.00%
A stock has had the following year-end prices and dividends: Year Price Dividend 1 $43.33 2 48.31 $0.54 3 57.23 0.57 4 45.31 0.80 5 52.23 0.85 6 61.31 0.93 What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations. Round the final answers to 2 decimal places.) Arithmetic return Geometric return % %
Suppose you are given the following information about 2 stocks, what is the expected return of a portfolio weighted 55% in stock A and 45% in stock B? E(RA)=16% E(RB)=8% σA=22% σB=12% σA,B=−0.003696 Enter rate in decimal form, rounded to 4th digit, as in "0.1234"
Consider the three stocks in the following table. P+ represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. PO 98 58 100 51 103 e 200 116 200 53 126 100 200 200 103 100 53 63 200 400 Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round Intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted Index Rate of return An equally weighted index ate of return % %
Use the data below to construct the advance/decline line and Arms ratio for the market. Volume is in thousands of shares. (Input all amounts as positive values. Do not round intermediate calculations. Round your "Arms Ratio" answers to 3 decimal places.) StocksAdvancing AdvancingVolume StocksDeclining DecliningVolume Monday 1,936 876,951 333 126,645 Tuesday 2,641 509,531 809 217,135 Wednesday 1,340 519,132 1,188 499,845 Thursday 2,159 942,526 840 314,846 Friday 2,033 596,483 1,205 381,953
Suppose a market consists of four stocks. The number of shares outstanding for each stock as well as the stock prices in two consecutive days are as follows: Stock A Stock B Stock C Stock D Shares outstanding 200 1000 400 3000 I $5 $30 $100 $40 Ро $15 $25 $80 $50 a) Compute the percentage increase in the price-weighted index for this market. b) Compute the percentage increase in the value-weighted index for this market. P₁

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