The​ S&P stock index represents a portfolio comprised of 500 large publicly traded companies.  On December​ 24, 2007, the index had a value of​ 1,410 and on December​ 24, 2008, the index was approximately   927.  If the average dividend paid on the stocks in the index is approximately   5.0 percent of the value of the index at the beginning of the​ year, what is the rate of return earned on the​ S&P index?  What is your assessment of the relative riskiness of investing in a single stock such as Google compared to investing in the​ S&P index​ (recall from Chapter 2 that you can purchase mutual funds that mimic the returns of the​ index)?           Question content area bottom Part 1 The rate of return earned on the​ S&P 500 is   enter your response here ​%.  ​(Round to two decimal​ places.) Part 2 What is your assessment of the relative riskiness of investing in a single​ stock, such as​ Google, compared to investing in the​ S&P index? ​ (Select the best choice​ below.)     A. In​ general, investing in the​ S&P index is riskier than investing in a single stock.     B. In​ general, investing in a single stock has the same relative riskiness as investing in the​ S&P index.     C. There is not enough information given to answer this question.     D. In​ general, investing in a single stock is riskier than investing in the​ S&P index.

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
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The​ S&P stock index represents a portfolio comprised of 500 large publicly traded companies.  On December​ 24, 2007, the index had a value of​ 1,410 and on December​ 24, 2008, the index was approximately

 

927.  If the average dividend paid on the stocks in the index is approximately

 

5.0 percent of the value of the index at the beginning of the​ year, what is the rate of return earned on the​ S&P index?  What is your assessment of the relative riskiness of investing in a single stock such as Google compared to investing in the​ S&P index​ (recall from Chapter 2 that you can purchase mutual funds that mimic the returns of the​ index)?

 

 

 

 

 

Question content area bottom

Part 1

The rate of return earned on the​ S&P 500 is

 

enter your response here

​%.  ​(Round to two decimal​ places.)

Part 2

What is your assessment of the relative riskiness of investing in a single​ stock, such as​ Google, compared to investing in the​ S&P index? ​ (Select the best choice​ below.)

 

 

A.

In​ general, investing in the​ S&P index is riskier than investing in a single stock.

 

 

B.

In​ general, investing in a single stock has the same relative riskiness as investing in the​ S&P index.

 

 

C.

There is not enough information given to answer this question.

 

 

D.

In​ general, investing in a single stock is riskier than investing in the​ S&P index.

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