Consider the three stocks in the following table. P(t) represents price at time t, and Q(t) represents shares outstanding at time t Stock C splits two-for-one in the last period. What is the rate of return for the price-weighted index that is formed using Stocks A, B and C from time period 1 to time period 2? Q(1) 100 200 200 B OO zero P(1) 95 C 45 100 -20.83% 20.83% None of the above P(2) 95 45 50 Q(2) 100 200 400

Consider the three stocks in the following table. P(t) represents price at time t, and Q(t) represents shares outstanding at time t Stock C splits two-for-one in the last period. What is the rate of return for the price-weighted index that is formed using Stocks A, B and C from time period 1 to time period 2? Q(1) 100 200 200 B OO zero P(1) 95 C 45 100 -20.83% 20.83% None of the above P(2) 95 45 50 Q(2) 100 200 400

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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What is the required rate of return on a preferred stock with a $50 par value, a stated annual dividend of 9% of par, and a current market price of (a) $31, (b) $40, (c) $52, and (d) $74 (assume the market is in equilibrium with the required return equal to the expected return)? Do not round intermediate calculations. Round the answers to two decimal places.
What is Stock X's geometric returns if it has the following returns? Year 1 8% Year 2 - 5% Year 3 10% Year 4 - 6% Year 5 15% a. 4.1%. b. 5.2% c. 6.8% d. 8.5%
A stock has had the following year-end prices and dividends: Year 1 2355N 4 6 Price $ 64.63 71.50 77.30 63.57 73.71 82.75 Dividend Arithmetic average return Geometric average return $.66 .71 .77 .86 .93 What are the arithmetic and geometric returns for the stock? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. % %
pm.3
Which of the following statement(s) is(are) true? 1) The real rate of interest is determined by the supply and demand for funds. II) The real rate of interest is determined by the expected rate of inflation. III) The real rate of interest is unaffected by actions of the Fed. IV) The real rate of interest is equal to the nominal interest rate plus the expected rate of inflation. III and IV only. I only. OII and III only. O, II, III, and IV only. OI and III only.
Use the portion of the stock table shown below to answer the questions that follow. Round dollar amounts to the nearest cent, if necessary. YTD %CHG 52- HI Week LO STOCK DIV YLD % VOL 100s CLOSE NET CHG 2.8 37.43 21.10 A1 0.99 3.7 789 27.02 –0.1 2.4 48.30 30.78 B1 ... 1303 41.68 0.4 If you purchased 400 shares of B1 stock at $45.03, what would the loss be if the shares were sold at the closing price indicated in the table.
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 Po 82 42 84 Rate of return 00 100 Divisor 200 200 P1 87 37 94 01 100 200 200 % P2 87 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) 370 47 92 100 200 400 b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Calculate the rate of return of the price-weighted index for the second period (t=1 to t=2).
Use the following information on Stocks X and Y to answer questions 1 through 3 (round to the nearest percent). Bear Market Normal Market Bull Market Probability 0.2 0.5 0.3 Stock X’s return -25% 10% 50% Stock Y’s return -15% 20% 10% What are the standard deviations of returns on Stocks X and Y?
Problem 2-12 (Algo) 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. Stock Po A B P1 01 P2 02 00 140 145 145 145 145 145 135 290 130 290 130 290 270 290 280 290 145 580 C Required: Calculate the first-period rates of return on the following indexes of the three stocks (t = 0 to t = 1): Note: Do not round intermediate calculations. Round your answers to 2 decimal places. a. A market-value-weighted index. b. An equally weighted index. a. Rate of return b. Rate of return % %
Consider the following information: Stock Return if Market Return Is: Stock –13% 10% A 0 14 B –5 21 C –25 36 D 10 8 E 15 -10 What is the beta of each of the stocks? (Leave no cells blank - be certain to enter "0" wherever required. Use decimals, not percents, in your calculations. A negative value should be indicated by a minus sign. Round your answers to 1 decimal place.) Stock Beta A B C D E
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 (t=2). Po A 100 B 60 C 120 Qo 100 200 200 P₁ 105 55 130 Rate of return b. An equally weighted index. Rate of return Q₁ 100 200 200 % P2 % 105 55 65 Calculate the first-period rates of return on the following indexes of the three stocks (t = O to t = 1): (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted index. Q2 100 200 400
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)?

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