ing (LO4, CFA2) You are given the following total market values for an index over a five-year period. Assuming the inde index value each year. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Market values Year 1: $4,587 million Year 2: $4,665 million Year 3: $5,026 million Year 4: $4,814 million Year 5: $5,363 million Index values +

ing (LO4, CFA2) You are given the following total market values for an index over a five-year period. Assuming the inde index value each year. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Market values Year 1: $4,587 million Year 2: $4,665 million Year 3: $5,026 million Year 4: $4,814 million Year 5: $5,363 million Index values +

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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Avondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of $3.00 and its current price is $79. What is its nominal annual rate of return? Do not round intermediate calculations. Round your answer to two decimal places. % What is its effective annual rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
4. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 3.50% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to imagine adding up an infinite number of dividends, Calculate the present value (PV) of the dividend paid today (De) and the discounted value of the dividends expected to be paid 10, 20, and 50 years from now (Dio, Dao, Duo). Assume that the stock's required return (r.) is 10.40%. Note: Carry and round the calculations to four decimal places. Time Period Now End of Year 10 End of Year 20 End of Year 50 Dividend's Expected Future Value Dividend's Expected Present Value Using the orange curve (square symbols), plot the present value of each of the expected future…
Based on the information given herei, what is the firm's current market cap? What is the firm's net income? The firm's current market cap is $ trillion, at the close of the trading day. (Round to three decimal places.) More info Apple Inc. (AAPL) NasdaqGS-NasdaqGS Real Time Price. Currency in USD 207.25 +0.14 (+0.07%) 206.99 -0.26 (-0.13%) At close: 4:00PM EDT After hours: 4:56PM EDT Summary Chart Conversations Statistics Previous Close Open Bid Ask Day's Range 52 Week Range Volume Avg. Volume 207.11 206.05 207.02 x 800 207.05 x 1000 204.52-207.81 149.16-209.50 Market Cap Beta PE Ratio (TTM) EPS (TTM) Earnings Date Forward Dividend & Yield Ex-Dividend Date Add to watchlist 20,036,697 23,442,660 1y Target Est Profile Financials Options Holders Historical Data 1.001T 1D 5D 1M 6M YTD 1Y 5Y Max 1.14 18.78 11.04 Oct 31, 2018- Nov 5, 2018 2.92 (1.40%) 2018-08-10 Buy 215.46 10 AM 12 PM Sell 2 PM - Analysis X
Suppose that the value of an investment in the stock market has increased at an average compound rate of about 5% since 1914. It is now 2020. Note: For all requirements, do not round intermediate calculations. Round your answer to 2 decimal places. If your great-grandfather invested $1,000 in 1914, how much would that investment be worth today? If an investment in 1914 has grown to $1 million, how much was invested in 1914?
following questions: a. What is the mid-rate for each maturity? b. What is the annual forward premium for all maturities? (Click on the icon to import the table into a spreadsheet.) Period spot 1 month 2 months 3 months 6 months 12 months 24 months Period Bid Rate Spot 1.3267 1.3265 1.3263 1.3259 1.3250 1.3228 1.3179 a. What is the mid-rate for each maturity? Calculate the mid-rate for each maturity below: (Round to five decimal places.) Days Forward Ask Rate 0 1.3268 1.3266 1.3264 1.3262 1.3252 1.3233 1.3207 Bid Rate US$/€ 1.3267 Ask Rate US$/€ 1.3268 Mid-rate US$/€
The price of Chive Corp. stock will be either $67 or $91 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 4 percent. a. Suppose the current price of the company's stock is $75. What is the value of the call option if the exercise price is $65 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Suppose the current price of the company's stock is $75. What is the value of the call option if the exercise price is $80 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Call value b. Call value
Arondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of $3, and its current price is $100. A. What is its nominal annual rate of return? Do not round your intermediate calculations. Round your answer to two decimal places. B. What is its effective annual rate of return? Do not round your intermediate calculations. Round your answer to two decimal places.
You purchase 100 shares of stock for $47 a share. The stock pays a $3 per share dividend at year - end. What is the rate of return on your investment for these end-of-year stock prices? What is your real (inflation - adjusted) rate of return? Assume an inflation rate of 4%. (Round your answers to 2 decimal places. Use the minus sign for negative numbers if it is necessary.) a) End of year stock price = $43 Real rate of return = ? Real rate= ? b) End of year stock price = $47 Real rate of return= ? Real rate= ? c) End of year stock price = $50 Real rate of return= ? Real rate = ?
Assume that in 2020, a Liberty Seated half dollar issued in 1891 was sold for $209,000. What was the rate of return on this investment? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Assume that the 10-year U.S. Treasury is yielding 4.0 percent. Next year's earnings for the S&P 500 are expected to be $120. Use the Fed model to estimate the value of the S&P 500. Do not round intermediate calculations. Round your answer to two decimal places. If the S&P 500 is trading at 2,650, is the market overvalued or undervalued, and by how much? Do not round intermediate calculations. Round your answer to two decimal places. The market is -Select- -Select- overvalued undervalued ✓by %.
The price of gold (end-of-year closing price in dollars per troy ounce) is shown in the table below. The CPI index for the given years is shown to the right. Complete parts (a) through (c) below. Average Annual Consumer Price Index (CPI) Year 1986 1996 2006 2016 Price $427 Year 1986 1996 2006 | 2016 CPI 109.6 156.9 201.6 240.0 $321 $642 $827 a. The prices shown in the table above are not adjusted for inflation. Revise the above table to express all prices in terms of 2016 dollars. Year 1986 1996 2006 2016 2016 Price (Round to the nearest cent as needed.)
3. The following table gives actual data on the U.S. CPI and the S&P 500 total return index (SPTRI). CPI SPTRI 12/3 1/2011 226 2159 12/3 1/2012 230 2504 12/3 1/2013 233 3316 12/3 1/2014 235 3769 А. Use this data to compute the average annual nominal return and real return for two consecutive 1- year holding period returns of a sto ck portfolio that matches the S&P 500 total return index. (for example you could compute 2011-12 and 2012-2013) Please use continuous compounding. Express your final answer in percentage. В. Now compute the average annual real return to a 2-year holding -period portfolio of your two consecutive years. С. You have a friend who has been studying the stock market for the last few years and is about to invest $10,000 in a highly diversified portfolio. After 10 years, your friend expects to have over $66,000 in real dollars. You recall from your favorite report in Econ 135 that the average 10 year holding period return is about 7% with a standard deviation of 6%.…

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