Concept explainers
a)
To determine: The average dividend yield for S&P 500.
Introduction:
Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the
b)
To determine: The volatility of the dividend yield.
Introduction:
Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings.
c)
To determine: The average annual return of the S&P500 of 2002 to 2014.
Introduction:
Average annaul return refers to the returns that an investment earns in an average year over different periods.
d)
To determine: The volatility of the S&P500 returns from
Introduction:
Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.
e)
To discuss: The capital gains or dividends are most important components of the average returns of S&P500 in the period.
Introduction:
Capital gains yield is a ratio that indicates the rise in the price of the common stock.

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