You pald cash for $800 worth of stock a year ago. Today the portfolio is worth $1,150. a. What rate of return did you earn on the Investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return % b. Now suppose that you bought the same stock but bought it on margin. The initial margin requirement was 55%. Recalculate your rate of return, ignoring any Interest due. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return c. Recalculate the rates of return for a cash purchase in the event that the stock is worth $750 today. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return

You pald cash for $800 worth of stock a year ago. Today the portfolio is worth $1,150. a. What rate of return did you earn on the Investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return % b. Now suppose that you bought the same stock but bought it on margin. The initial margin requirement was 55%. Recalculate your rate of return, ignoring any Interest due. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return c. Recalculate the rates of return for a cash purchase in the event that the stock is worth $750 today. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return

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

See similar textbooks

Similar questions

PLEASE ANSWER CORRECTLY FULLY DONT GIVE ME THE WRONG ANSWER
What is the solution and the working
Today, you sold your Riot Blockchain, Inc stock (ticker: RIOT) for $54.5/share. Last year, you paid $51.5/share for that stock. During the year, RIOT paid you $2/share in dividends. If inflation averaged 2.8% during the year, your approximate real rate of return on the RIOT investment is: a. 12.5 percent b. 9.7 percent c. 12.2 percent d. 3.5 percent e. 6.9 percent
WINNER plans to invest in one of two stocks, each of which requires the same initial investment. The estimated return (cash flow) of these investments for the next year depends on economic conditions and their respective possibilities. State of Economy Probability Rate of Return Stock A Stock B Boom 0.15 0.30 0.25 Normal 0.55 0.12 0.08 Recession 0.30 0.01 -0.05 i) Compute expected rate of return for each asset. ii) Compute variance and standard deviation of rate of return for each asset. iii) Which asset should they purchase?
Please give me answer very fast in 5 min
Please select the option that best analyzes the RETURN ON EQUITY for our example company. Return on equity tells us how well we have used our owners' investments to provide a return on their investment. Our investors require a return of 5%, so they would accept the return on equity for the year, since it is LESS than their return they accept to earn. Return on equity tells us how well we have used our owners' investments to provide a return on their investment. Our investors require a return of 5%, and they are content as the example company provided a return EQUAL to their expected return. Return on equity tells us how well we have used our owners' investments to provide a return on their investment. Our investors require a return of 5%, so they would accept the return on equity for the year. Return on equity tells us how well we have used our owners' investments to provide a return on their investment. Our investors require a return of 5%, so they would NOT ACCEPT the…
Suppose that you sell short 500 shares of Intel, currently selling for $40 per share. Your initial percentage margin is 60%. Assume you earn no interest on the funds in your margin account and Intel has paid no dividends. a. What will be your rate of return after one year if Intel stock is selling at $40? b. If the maintenance margin is 30%, how high can Intel's price rise before you get a margin call?
3. 4. 7. A stockbroker calls you and suggests that you invest in the Lauren Computer Company. After analyzing the firm's annual report and other material, you believe that the distribu- tion of expected rates of return is as follows: LAUREN COMPUTER CO. Possible Rate of Return -0.60 -0.30 -0.10 0.20 0.40 0.80 Probability 0.05 0.20 0.10 0.30 0.20 0.15 Compute the expected return [E(R;)] on Lauren Computer stock. What reforms to the financial system might reduce its exposure to systemic risk?
As an equity analyst you are concerned with what will happen to the required return to Universal Toddler' stock as market conditions change. Suppose rRF = 5%, rM = 12%, and bUT = 1.8. Under current conditions, what is rUT, the required rate of return on UT Stock? Round your answer to one decimal place. % Now suppose rRF increases to 6%. The slope of the SML remains constant. How would this affect rM and rUT? I. Both rM and rUT will remain the same.II. Both rM and rUT will increase by 1 percentage point.III. rM will remain the same and rUT will increase by 1 percentage point.IV. rM will increase by 1 percentage point and rUT will remain the same.V. Both rM and rUT will decrease by 1 percentage point. Now suppose rRF decreases to 4%. The slope of the SML remains constant. How would this affect rM and rUT? I. Both rM and rUT will increase by 1 percentage point.II. Both rM and rUT will remain the same.III. Both rM and rUT will decrease by 1 percentage point.IV. rM will decrease…
Hand written plz asap... I'll rate plz fast solve it... But hand written otherwise downvote...
Suppose you bought a stock for $27.1 per share and you sold it for $33.7 after 3 years. The stock did not pay any dividends. What was your compound average monthly return from this investment? Answer in percent, rounded to two decimal places.
One year ago you bought the common stock of Mizuho at ¥1050 in Tokyo Stock Exchange. The price is ¥1000 today. You received a dividend of ¥120 per share during the period. The exchange rate was ¥100 = $1 when you bought the stock and it is ¥80 = $1 today. Calculate the realized dollar rate of return on the stock if you sell the stock today. Select one: -6.89% O b. 28.11% O C. 33.33% O d. 23.13% a.

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS