¶ Insert T Table Chart Text Shape Media Comment A stock has had the following year-end prices and dividends: a. b. Calculate the holding period return for each year from year 1 to year 5. (15.61-13.25+.15)/13.25=.1894-18.9% Year 1: Year 2: Year 3: 058-5.84% Year 4: (17.12-13.25+.15+.18+.20+.24)/13.25=. 3501+1=1.3501^(1/4)=1.0779-1-0.0779-7.794% Year. 5: (20.43-13.25+.15+.18+.20+.24+.28)/13.25=. (16.72-13.25+.15+.18)/13.25-.286+1=1.286^(1/2)-1.134-1-.134-13.44% (15.18-13.25+.15+.18+.20)/13.25-.1856+1=1.1856^(1/3)=1.058-1=. 6211+1=1.6211^(1/5)=1.101-1-.1014-10.14% Calculate the arithmetic average return, geometric average return, and standard deviation of five annual returns you compute from part al Year 012345 Price $13.25 15.61 16.72 15.18 17.12 20.43 Dividend $0.15 0.18 0.20 0.24 0.28
¶ Insert T Table Chart Text Shape Media Comment A stock has had the following year-end prices and dividends: a. b. Calculate the holding period return for each year from year 1 to year 5. (15.61-13.25+.15)/13.25=.1894-18.9% Year 1: Year 2: Year 3: 058-5.84% Year 4: (17.12-13.25+.15+.18+.20+.24)/13.25=. 3501+1=1.3501^(1/4)=1.0779-1-0.0779-7.794% Year. 5: (20.43-13.25+.15+.18+.20+.24+.28)/13.25=. (16.72-13.25+.15+.18)/13.25-.286+1=1.286^(1/2)-1.134-1-.134-13.44% (15.18-13.25+.15+.18+.20)/13.25-.1856+1=1.1856^(1/3)=1.058-1=. 6211+1=1.6211^(1/5)=1.101-1-.1014-10.14% Calculate the arithmetic average return, geometric average return, and standard deviation of five annual returns you compute from part al Year 012345 Price $13.25 15.61 16.72 15.18 17.12 20.43 Dividend $0.15 0.18 0.20 0.24 0.28
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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T
Insert Table Chart Text Shape Media Comment
A stock has had the following year-end prices and dividends:
a.
Calculate the holding period return for each year from year 1 to year 5.
Year 1: (15.61-13.25+.15)/13.25=.1894-18.9%
Year 2:
Year 3:
058-5.84%
Year 4: (17.12-13.25+.15+.18+.20+.24)/13.25=.
3501+1=1.3501^(1/4)=1.0779-1-0.0779-7.794%
Year. 5: (20.43-13.25+.15+.18+.20+.24+.28)/13.25=.
b.
(16.72-13.25+.15+.18)/13.25=.286+1=1.286^(1/2)=1.134-1-.134-13.44%
(15.18-13.25+.15+.18+.20)/13.25=.1856+1=1.1856^(1/3)=1.058-1=.
6211+1=1.6211^(1/5)-1.101-1-.1014-10.14%
Calculate the arithmetic average return, geometric average return, and standard deviation
of five annual returns you compute from part al
Year
0
1
SAWN
2
3
4
5
Price
$13.25
15.61
16.72
15.18
17.12
20.43
Dividend
$0.15
0.18
0.20
0.24
0.28
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