Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. A B с Po 83 43 86 Rate of return Divisor lo 100 200 200 Rate of return P1 88 38 96 2.35 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) 4.71% 01 100 200 200 P2 88 b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) % 38 48 100 200 400 c. Calculate the rate of return of the price-weighted index for the second period (t = 1 to t=2).

Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. A B с Po 83 43 86 Rate of return Divisor lo 100 200 200 Rate of return P1 88 38 96 2.35 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) 4.71% 01 100 200 200 P2 88 b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) % 38 48 100 200 400 c. Calculate the rate of return of the price-weighted index for the second period (t = 1 to t=2).

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 three stocks in the following table. Pt represents price at time t, Qt represents shares outstanding at time t. Stock C splits two for one in the second period from t=1 to t=2. Calculate the rate of return on a price-weighted index consisting of the three stocks for the first period from t=0 to t=1. Answer in percentage. Answer options: 0.00% 2.49% 6.06% 8.95% 1.30%
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. A B C Po 82 42 84 00 100 200 200 Divisor P1 87 37 94 01 100 200 200 P2 87 37 47 92 100 200 400 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Rate of return I % b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) D c. Calculate the rate of return of the price-weighted index for the second period (t=1 to t = 2).
Consider the following information: State Probability Stock A Stock B Stock C Boom 0.32 0.17 -0.11 -0.06 Bust 0.68 -0.03 -0.01 0.23 What is the expected return of a portfolio that has invested $16,157 in Stock A, $19,654 in Stock B, and $9,659 in Stock C? (Hint: calculate weights of each stock first). Enter the answer with 4 decimals (e.g. 0.1234).
Suppose you are given the following information about 2 stocks, what is the Sharpe Ratio of a portfolio weighted 55% in stock A and 45% in stock B? E(RA)=16% E(RB)=8% σA=22% σB=12% σA,B=−0.003696 rf=3% Enter rate in decimal form, rounded to 4th digit, as in "0.1234"
please help with this question
Consider three stocks, X, Y, and Z, in the following table. P0, P1, and P2 represent prices at time 0, 1, and 2. Q0, Q1, and Q2 represent shares outstanding. Stock Z splits two for one in the last period. Stocks PO Q0 P1 Q1 P2 Q2 ? X 90 100 95 100 95 100 Y 50 200 60 200 45 200 Z 100 200 110 200 55 400 Using the above information to compute an equally weighted average returns in the three stocks from periods 1 to 2 0% O-1.85% -8.33% -25.00%
Assume the stock's future prices of stock A and stock B as following distribution State Future Price Stock A Future price Stock B $10 $7 $8 $9 If the time 1 price of stock A is $6, and the time 1 price of stock B is $5. And C and C2 represents the time 1 price of ciaim on state 1, C, represents the time 1 prices of unit claims on states 1 and 2. Use the information about stock prices and payoffs to • Find the time 1 prices C, and C2. • Find the risk - free rate of return, obtained in this market
Consider the three stocks in the following table. P+ represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. PO 98 58 100 51 103 e 200 116 200 53 126 100 200 200 103 100 53 63 200 400 Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round Intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted Index Rate of return An equally weighted index ate of return % %
Vijay
Consider the three stocks in the following table. P(t) represents price at time t, and Q(t) represents shares outstanding at time t. Stock C splits two-for-one in the last period. What is the rate of return for the price-weighted index that is formed using Stocks A, B, and C from time period 1 to time period 2? B C zero P(1) 95 45 100 -20.83% 20.83% None of the above Q(1) 100 200 200 P(2) 95 45 50 Q(2) 100 200 400
Consider the three stocks in the following table. P+ represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. ABU А Po 95 55 110 Rate of return lo 100 200 200 P1 100 50 120 Rate of return b. An equally weighted index Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round Intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted index 96 01 100 200 200 96 P₂ 100 50 60 92 100 200 400
Consider the following information: State Probability Stock A Stock B Stock C Boom 0.65 0.24 0 -0.09 Bust 0.35 -0.12 0.2 0.04 What is the expected return on an equally weighted portfolio of these three stocks? (Hint: Equally means that each stock has the same weight. Given that there are only 3 stocks, each has a weight of 1/3) Enter the answer with 4 decimals (e.g. 0.1234).

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