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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 20 98 100 58 200 116. 200 P1 103 53 126 Rate of return b. An equally weighted index 91 100 % 200 200 P2 103 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 53 63 92 100 200 400

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 20 98 100 58 200 116. 200 P1 103 53 126 Rate of return b. An equally weighted index 91 100 % 200 200 P2 103 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 53 63 92 100 200 400

Essentials Of Investments
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
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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 98 58 116 Rate of return 90 100 200 200 P1 103 53 126 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 % 01 100 200 200 % P2 103 53 63 Q2 100 200 400
Transcribed Image Text: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 98 58 116 Rate of return 90 100 200 200 P1 103 53 126 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 % 01 100 200 200 % P2 103 53 63 Q2 100 200 400
Both a call and a put currently are traded on stock XYZ; both have strike prices of $60 and expirations of six months. Required: a. What will be the profit/loss to an investor who buys the call for $4.15 in the following scenarios for stock prices in six months? (Loss amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Stock Price Profit/Loss $ $ GA $ GA b. What will be the profit/loss in each scenario to an investor who buys the put for $7.00? (Loss amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Stock Price $ $ GA 50 55 60 65 70 GA A 50 55 60 65 70 Profit/Loss
Transcribed Image Text:Both a call and a put currently are traded on stock XYZ; both have strike prices of $60 and expirations of six months. Required: a. What will be the profit/loss to an investor who buys the call for $4.15 in the following scenarios for stock prices in six months? (Loss amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Stock Price Profit/Loss $ $ GA $ GA b. What will be the profit/loss in each scenario to an investor who buys the put for $7.00? (Loss amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Stock Price $ $ GA 50 55 60 65 70 GA A 50 55 60 65 70 Profit/Loss
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