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. P0 Q0 P1 Q1 P2 Q2 A 82 100 87 100 87 100 B 42 200 37 200 37 200 C 84 200 94 200 47 400 a. Calculate the rate of return on a price - weighted index of the three stocks for the first period (t = 0 tot = 1). b. What will be the divisor for the price - weighted index in year 2? c. Calculate the rate of return of the price - weighted index for the second period (t = 1 to t = 2). *note: Please explain why the reture rate for the second period is 0. Thanks!*

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. P0 Q0 P1 Q1 P2 Q2 A 82 100 87 100 87 100 B 42 200 37 200 37 200 C 84 200 94 200 47 400 a. Calculate the rate of return on a price - weighted index of the three stocks for the first period (t = 0 tot = 1). b. What will be the divisor for the price - weighted index in year 2? c. Calculate the rate of return of the price - weighted index for the second period (t = 1 to t = 2). note: Please explain why the reture rate for the second period is 0. Thanks!

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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A stock has had the following year-end prices and dividends: TIT Year Price Dividend $16.25 1 18.43 $ .15 2 19.43 .30 3 17.93 .33 4 20.27 .34 23.38 .40 What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Arithmetic return |% Geometric return
1. Consider the three stocks in the following table. P, represents price at time t, and Q, represents shares outstanding at time t. Calculate the rates of return on the following indexes of the three stocks: A B с Po 90 50 100 a. A market-value-weighted index. b. An equally weighted index. Qo 100 200 200 P₁ 95 45 110 Q₁ 100 200 200
The index model has been estimated from the excess returns for stock A with the following results: = RA 12.00% +1.55RM+ eA °M = 24.00% σ(eд) = 18.50% What is the standard deviation of the return for stock A? (Round your answer to 2 decimal places.) Standard deviation %
Consider a market value-weighted index consisting of 3 stocks: A, B, and C. The stocks' prices at time 0 (p0) and time 1 (p1) are given below, along with the number of shares outstanding. Calculate the index levels at time 0. Round your answer to 4 decimal places. For example, if your answer is 3.205%, then please write down 0.0321. stock p0 p1 outstanding shares 43 45 200 69 50 500 11 12 600 A B C
There are three stocks in a price-weighted index: A $100 B $20 C $60 a. What is the average value for the index? b. Assume stock A goes down by 25 percent and stock B goes up by 25 percent, and stock C remains the same. What is the new average value for the index? c. Explain why in part b the average changed with two stocks moving up and down by the same percentage amount.
Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 8%; rRF = 3%; rM = 12%. Round your answer to two decimal places.
6
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 % %
Please refer to the screenshot.
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.) 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.)
Consider the following information on Stocks I and II: The market risk premium is 8 percent and the risk-free rate is 40.5 percent. a-1. What is the beta of each stock? Note: Do not round Intermedlate calculations. Round your answers to 2 decimal places. a-2. Which stock has the most systematic risk? Stock I Stock II b-1. What is the standard deviation of each stock? Note: Do not round Intermedlate calculations. Enter your answers as a percent rounded to 2 decimal places. b.2. Which one has the most unsystemstic risk? Stock I Stock II c. Which stock is "riskier"? Stock I Stock II

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