30.Questions 30 and 31 are related.Use the following information regarding an equal-weighted equity index and assume that all dividendpayments 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 ShareA$26$0.50B$45$0.20C$36$0.40Ꭰ$135$0.50Note: The dollar value of the index on December 31, 2021 is $10,000 and using a divisor of 100, the index levelequals 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 rebalancingis closest to:16.75%18.55%19.24%$25$50$31.25$1007.35%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%

A dividend is a payment made to shareholders by a company in the form of cash or extra stock. As…

Answered: a. b. C. 31. a. b. c. The weight of…

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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Consider the following table for different assets for 1926 through 2020. Standard Deviation 19.7% Series Large-company stocks Small-company stocks Long-term corporate bonds Long-term government bonds Intermediate-term government bonds U.S. Treasury bills Inflation Average return 12.2% 16.2 6.5 6.1 5.3 3.3 2.9 Expected range of returns Expected range of returns a. What range of returns would you expect to see 68 percent of the time for large-company stocks? Note: A negative answer should be indicated by a minus sign. Enter your answers from lowest to highest. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. What about 95 percent of the time? 31.3 8.5 9.8 Note: A negative answer should be indicated by a minus sign. Enter your answers from lowest to highest. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. % to % to 5.6 3.1 4.0 % %
Returns State of Economy Prob J K Recession 0.25 -0.02 0.034 Normal 0.6 0.138 0.062 Boom 0.15 0.218 0.092 Based on the following information, 1. calculate the expected return and standard deviation for each of the following stocks. 2.What are the covariance and correlation between the returns of the two stocks? 3.Calculate the portfolio return and portfolio standard deviation if you invest equally in each asset.
Problem 11-6 Risk Premiums (LO1) Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market Return (8) T-Bill Return (%) 2016 13.0 0.2 2017 21.0 0.8 2018 -6.2 1.8 2019 29.8 2.1 2020 20.6 0.4 Check my work Required: a. What was the risk premium on common stock in each year? b. What was the average risk premium? c. What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.) Complete this question by entering your answers in the tabs below. Required A Required B Required C What was the risk premium on common stock in each year? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative values should be entered with a negative sign. Year Risk Premium 2016 % 2017 % 2018 % 2019 % 2020 %
Consider the following information on two stocks: P(State) Stock A Stock B Boom 20% 30% 20% Normal 50% 12% -5% Slow 15% 4% 8% Recession 15% -10% 10% Calculate the covariance(A,B). (Enter percentages as decimals and round to 4 decimals)
Review the following market information: Current Stock Market Return 11.25% Current T-Bill Price $979.43 Historic T-Bill Average Return 2.80% Historic Stock Market Average Return 8.10% Stock Beta 1.23 What is the required return (rounded to two places)?
QUESTION 9 Use the data in the table shown below. What is the geometric average return over the span of three years? Date 12/31/2018 12/31/2019 12/31/2020 12/31/2021 O a. 28.7% O b.7.5% c.9.5% O d. 8.9% Price $43.00 $45.60 $42.60 $52.50 Dividend $0.80 $0.80 $0.90
Q15
Kindly make a thorough analysis or explanation of this return on equity graph.
2-13 Historical Realized Rates of Return You are considering an investment in ei er individual stocks or a portfolio of stocks. The two stocks you are researching, Stock A and Stock B, have the following historical returns: Year 2014 -20.00% -5.00% 2015 42.00 15.00 2016 20.00 -13.00 2017 -8.00 50.00 2018 25.00 12.00 a. Calculate the average rate of return for each stock during the 5-year period. b. Suppose you had held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? C. Calculate the standard deviation of returns for each stock and for the portfolio. d. Suppose you are a risk-averse investor. Assuming Stocks A and B are your only choices, would you prefer to hold Stock A. Stock B, or the portfolio? Why?
Suppose the return of asset A to D, is given as follows: Asset 2018 2019 2020 2021 A 9% 10% -2 % 15% B 7% 10% 5 % 9% C -11% 20% 12% 8% D 10% 16% -5 % -8% Calculate the expected return of: a. One stock at a time b. Portfolio of A, B & D, and, B, D, & A c. Portfolio of A & B, and, D & B d. Portfolio of all the four stocks

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