Results of investments in stock.

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Answer 1

Question

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.

Economics Concept Introduction

Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.

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In this question, you will test relative purchasing parity (PPP) using the data. Use yearly data from FRED website from 1971 to 2020: (i) The Canadian Dollars to U.S. Dollar Spot Exchange Rate (ER) (ii) Consumer price index for Canada (CAN_CPI), and (iii) Consumer price index for the US (US_CPI). Inflation is measured by the consumer price index (CPI). The relative PPP equation is: AE CAN$/US$ ECAN$/US$ = π CAN - πUS Submit the Excel sheet that you worked on. 1. First, compute the percentage change in the exchange rate (left-hand side of the equation). Caculate the variable for each year from 1972 to 2020 in Column E (named Change_ER) of the Excel sheet. For example, for 1972, compute E3: (B3-B2)/B2). ER1972 ER1971 ER 1971 (in Excel, the formula in cell

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8. The current price of 3M stock is $87 per share. The previous dividend paid was $5.96, and the next dividend is $6.25, assuming a growth rate of 4.86% per year. What is the forward (next 12 months) dividend yield? Show at least two decimal places, as in x.xx% %

Answer 2

Question

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.

Economics Concept Introduction

Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.

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Answer 3

Question

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.

Economics Concept Introduction

Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.

Economics Concept Introduction

Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.

Economics Concept Introduction

Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.

Answer 6

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.

Economics Concept Introduction

Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.

Answer 7

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Answer 8

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.