The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio managerbelieves these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnellshareholders approve a 2-for-1 stock split on January 1, 2020.Douglas McDonnellDynamics GeneralInternational RockwellNew divisorShares(millions)185Rate of return450270%1/1/19$ 694776Pricea. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimalplaces.)1/1/20$7240651/1/21$ 855479b. Calculate the rate of return on the index for the year ending December 31, 2020, if Douglas McDonnell's share price onJanuary 1, 2021, is $26.15 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to2 decimal places.)

Price-Weighted Index:A price-weighted index's value is determined by adding the prices of all of its…

Answered: The following three defense stocks are…

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 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.)
30. Questions 30 and 31 are related. Use the following information regarding an equal-weighted equity index and assume that all dividend payments are made at the end of the year and are reinvested in the stock that paid the dividend. Security Price at the End of 2021 Price at the End of 2022 Dividends per Share A $26 $0.50 B $45 $0.20 C $36 $0.40 Ꭰ $135 $0.50 Note: The dollar value of the index on December 31, 2021 is $10,000 and using a divisor of 100, the index level equals 100. a. b. C. 31. a. b. C. The weight of Security B in the index on December 31, 2022 with dividends reinvested and before rebalancing is closest to: 16.75% 18.55% 19.24% $25 $50 $31.25 $100 7.35% 7.87% The total return on the index referenced in the previous question for the year 2022 is closest to: 8.90% d. 22.16% e. 23.33% f. 25.00% d. 10.53% e. 12.10% f. 12.54%
XYZ's stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2019 $ 155 2020 185 2021 145 2022 155 Arithmetic average rate of return Geometric average rate of return An investor buys three shares of XYZ at the beginning of 2019, buys another two shares at the beginning of 2020, sells one share at the beginning of 2021, and sells all four remaining shares at the beginning of 2022. $ 3 3 3 Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answers to 2 decimal places. Do not round other calculations.) % % Dollar-weighted rate of return wwww 3 % b. What is the dollar-weighted rat of return? (Hint. Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2019, to January 1, 2022. If your calculator cannot calculate IRR, you will have to use trial and error or a spreadsheet…
As an analyst at an investment bank, you are asked to compare the monthly returns of the two stocks Tesla and Apple Inc during the period of August 2020 to March 2021: Tesla, Xi Aug Sep Oct Nov Dec Jan Feb Mar 0.038 0.199 0.187 -0.069 0.481 0.392 -0.039 -0.150 Apple Inc, y: 0.184 -0.010 0.111 -0.042 0.027 0.052 0.051 -0.106 Σx₁ = 1.039 Σ(x-x)² = 0.3549 Σχ Σy = 0.267 Σ(y: - y)2 = 0.0564
Bhupatbhai
Assume we are in July, 2023. In July of 2023, the share prices of company B are $80 per share. You believe they should be $30 per share, and are thus overvalued. December 2023 put options on a strike price of $60 per share are currently valued at $5. Each put contract is based on 100 shares. a.) What is your net dollar profit or loss as a holder of the put contract (based ona contract size of 100 shares) if we arrive at expiry in December and you are wrong and Company B shares are selling for $100? (Show your working in full)
17. Based on the following table, if you invest $15,000 into AAPL stock at the beginning of the period, what would be the dollar value of your investment at the end of the time period? AAPL Date 2/1/2023 13.33% 3/1/2023 -13.99% 4/1/2023 6.53% 5/1/2023 -3.68% 6/1/2023 9.01% 7/1/2023 1.81% 8/1/2023 7.13% 9/1/2023 0.43% 10/1/2023 -2.66% 11/1/2023 5.33% 12/1/2023 4.77% 1/1/2024 12.89% Average Variance St. Dev. A. $15,512 B. $16,154 C. $19,467 D. $21,725 E. $22,831 3.41% 0.005910 7.69%
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On 13th November 2019, Marks & Spencer’s CEO buys 100,000 shares of MKS at £185.5. Outline the key steps if you are using the market model to estimate the cumulative abnormal returns CAR (0, 60) event window related to this event.
Graphical Designs is offering 15-15 preferred stock. The stock will pay an annual dividend of $15 with the first dividend payment occurring 15 years from today. The required return on this stock is 4 45 percent What is the price of the stock today? Mutiple Choice O O O $10324 $33708
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). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. Douglas McDonnell Dynamics General International Rockwell Shares (millions) 215 455 1/1/22 $ 64 Price 1/1/23 1/1/24 72 . $ 68 64 $ 82 78 250 101 90 106 a. Calculate the initial value of the index if a value-weighting scheme is used. Note: Round your answer to 2 decimal places. Index value 49,045.00 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 valué should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. 2022 return 2023 return
You are given the following information concerning two stocks that make up an index. Assume the value-weighted index level was 300.45 at the beginning of the year. What is the index level at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Kirk, Inc. Picard Co. Index level Shares Outstanding 40,000 29,000 Price per Share Beginning of Year $38 73 End of Year $ 42 81

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