The following three defense stocks are to be combined into a stock index in January 2022 (perhaps a portfolio manager bellevesthese stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a3-for-1 stock split on January 1, 2023.Douglas McDonnellDynamics GeneralInternational RockwellNew divisorShares(millions) 1/1/22Rate of return340458%45Price1/1/23a. What is the new divisor for the index?Note: Do not round intermediate calculations. Round your answer to 3 decimal places.$ 10639631/1/24$ 1185379b. Calculate the rate of return on the index for the year ending December 31, 2023, if Douglas McDonnell's share price on January1, 2024, is $39.33 per share.Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.

The division of a company's current shares into multiple shares is referred to as a stock split. The…

mese stocks are an appropriate benchmark for his or her performance). Suppose that Douglas -for-1 stock split on January 1, 2023. Douglas McDonnell Dynamics General International Rockwell Shares (millions) 1/1/22 340 $ 103 458 418 What is the new divisor for the index? Note: Do not ro it inte Price 1/1/23 $ 106 63 1/1/24 $ 118 53 79

mese stocks are an appropriate benchmark for his or her performance). Suppose that Douglas -for-1 stock split on January 1, 2023. Douglas McDonnell Dynamics General International Rockwell Shares (millions) 1/1/22 340 $ 103 458 418 What is the new divisor for the index? Note: Do not ro it inte Price 1/1/23 $ 106 63 1/1/24 $ 118 53 79

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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The following three defense stocks are to be combined into a stock index in January 2022 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Douglas McDonnell Dynamics General International Rockwell Index value Shares (millions) 430 535 210 2022 return 2023 return a. Calculate the initial value of the index if a price-weighting scheme is used. 1/1/22 $ 108 38 67 Price 1/1/23 $ 114 34 56 % % b. What is the rate of return on this index for the year ending December 31, 2022? For the year ending December 31, 2023? Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. 1/1/24 $ 131 48 70
H2. A benchmark index has three stocks priced at $60, $65, and $70. The number of outstanding shares for each is 444,000 shares, 555,000 shares, and 777,000 shares, respectively. Suppose the price of these three stocks changed to $40, $70, and $90, respectively and number of outstanding shares did not change, what is the equal-weighted index return?
The EV Index is a price weighted stock index based on the 3 largest electric vehicle manufacturers in the nation. Consider these stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. (Please pay close attention to stock split) P0 Q0 P1 Q1 P2 Q2 A 80 200 85 200 90 200 B 60 300 70 300 35 600 C 65 200 67 200 70 200 a. What is the divisor for the price weighted index in year 2?2.69 (sample answer: 2.55) b. What is the price weighted index at t=1? 64 (sample answer: 156.45) c. What is the price weighted index at t=2? 70.63(1sample answer: 56.45)
The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 2-for-1 stock split on January 1, 2020. Douglas McDonnell Dynamics General International Rockwell New divisor Shares (millions) 180 325 370 Rate of return 1/1/19 $ 60 68 97 Price 1/1/20 $ 64 64 86 a. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimal places.) 1/1/21 $77 78 100 b. Calculate the rate of return on the index for the year ending December 31, 2020, if Douglas McDonnell's share price on January 1, 2021, is $23.42 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
The Beta for Stock Q is _____. Do not round intermediate work, but round your final answer to 2 decimal places (example: if your answer is 1.2345, you should enter 1.23). Margin of error for correct responses: +/- .03 expected return standard deviation covariance with S&P500 Stock Q 9% .0023 .0003 S&P500 10% 0.014 T-bonds 3%
There are three stocks in the index alpha, beta, and gamma. The stocks sell for $102 $345 and $87 respectively. If beta undergoes a 3 for 1 stock split, what is the new divisor for the price weighted index? (a) 2.34 (b) 7.81 (c) 1.71 (d) 2.07
Bhupatbhai
EXCEL PROJECT AND EXCEL SOLUTION Consider the following stocks, all of which will pay a liquidating dividend in a year and nothing in the interim: Stock A Stock B Stock с Stock D Market Capitalization (5 million) 800 750 950 900 Expected Liquidating Dividend ($ million) 1000 1000 1000 1000 Beta PLEASE SHOW SOLUTIONS IN EXCEL 0.77 1.46 1.25 1.07 a. Calculate the expected return of each stock. b. What is the sign of correlation between the expected return and market capitalization of the stocks? In Problem 20, assume the risk-free rate is 3% and the market risk premium is 7%. a. What does the CAPM predict the expected return for each stock should be? b. Clearly, the CAPM predictions are not equal to the actual expected returns, so the CAPM does not hold. You decide to investigate this further. To see what kind of mistakes the CAPM is making, you decide to regress the actual expected return onto the expected return predicted by the CAPM.49 What is the intercept and slope coefficient of…
Consider 2 stocks in the following table. We create a stock index of companies that make stuff for Spring Break. stocks PO Q0 P1 Q1 ABC, Inc. $ 370p0 1200q0 $400p1 1200q1 XYZ, Inc. $650p0 250q0 $620p 1 250q1 What is the return on a equal - weighted index of these two stocks in percent to 2 decimal places
You are given the following information regarding four stocks in a portfolio: Company # of Shares Price ($) 2020 Price ($) 2021 ELITE 40,000 3.11 2.99 FTNA 5,000 30.37 34.10 GWEST 55,000 2.05 1.80 TTECH 20,000 5.55 4.60 Assuming 2020 is the base year with an index value of 500: i. Compute a price-weighted index of these four stocks for 2021. ii. Compute a value-weighted index of these four stocks for 2021. What is the percentage change in the value of the index from 2020 to 2021? iii. Compute the un-weighted index of these four stocks for 2019. What is the percentage change in the value of the index from 2020 to 2021
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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

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