Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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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. ABC Po 86 46 92 le 100 200 200 Rate of return P1 91 41 102 Q1 100 1.89 % 200 200 P2 91 41 51 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.) 22 100 200 400arrow_forwardYou have a portfolio with the following: Stock Number of Shares Price Expected Return W 975 $ 56 13% X 875 33 17 Y 625 69 15 Z 850 54 16 What is the expected return of your portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)arrow_forwardYou own a portfolio that has $2,045 invested in Stock A and $4,096 invested in Stock B. If the expected returns on these stocks are 14 percent and 8 percent, respectively, what is the expected return (in percent) on the portfolio? Answer to two decimals.arrow_forward
- 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. Stock A B C Po 90 45 80 90 425 450 650 a. Rate of return b. New divisor c. Rate of return P1 95 40 90 91 425 450 650 % P2 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). Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. Calculate the new divisor for the price-weighted index in year 2. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c. Calculate the rate of return for the second period (t=1 to t = 2). Note: Round your answer to 2 decimal places. % 92 425 450 95 40 45 1,300arrow_forwardConsider the following information: State Probability Stock A Stock B Stock C Boom 0.32 0.09 -0.01 0.01 Bust 0.68 -0.05 0.28 0.03 What is the expected return of a portfolio that has invested $9,981 in Stock A, $6,817 in Stock B, and $2,123 in Stock C? (Hint: calculate weights of each stock first). Enter the answer with 4 decimals (e.g. 0.1234).arrow_forwardYour portfolio is comprised of 30 percent of Stock X, 20 percent of Stock Y, and 50 percent of Stock Z. Stock X has a beta of 1.05, Stock Y has a beta of 0.80, and Stock Z has a beta of 1.43. What is the beta of your portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)arrow_forward
- Consider the following information: Probability of State of Portfolio Return if State State of Economy Economy Occurs Recession .20 -13 Вoom .80 .19 Calculate the expected return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return %arrow_forwardYou own a portfolio that is 25% invested in Stock X, 40% in Stock Y, and 35% in Stock Z. The expected returns on these three stocks are 10%, 13%, and 15%, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected returnarrow_forwardYou own a stock portfolio invested 32 percent in Stock Q, 22 percent in Stock R, 19 percent in Stock S, and 27 percent in Stock T. The betas for these four stocks are 1.35, 0.88, 1.74, and 0.62, respectively. What is the portfolio beta? Enter the answer with 4 decimals (e.g. 1.1234)arrow_forward
- Give typing answer with explanation and conclusionarrow_forwardte.2arrow_forwardConsider 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).arrow_forward
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