Adequate information: Face value is $1000. The purchase price is $1010. The selling price after one year is $1052. The coupon rate is 4.9%. To calculate: The total dollar return on investment . Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

Question

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Answer 1

Question

Chapter 10, Problem 4QAP

A

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total dollar return on investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

B

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total nominal rate of return.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

C

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

The inflation rate is 3%.

To calculate: The real rate of return on the investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

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Please include the excel formula Suppose you bought a bond with an annual coupon of 6 percent one year ago for $1,010. The bond sells for $1,025 today.a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?b. What was your total nominal rate of return on this investment over the past year?c. If the inflation rate last year was 3 percent, what was your total real rate of return on this investment? Input area: Coupon rate 6% Initial price $1,010 Ending price $1,025 Par value $1,000 Inflation rate 3% (Use cells A6 to B10 from the given information to complete this question.) Output area: Coupon paid Dollar return Nominal return Real return

Suppose you bought a bond with an annual coupon rate of 4 percent one year ago for $800. The bond sells for $850 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? b. What was your total nominal rate of return on this investment over the past year? c. If the inflation rate last year was 2 percent, what was your total real rate of return on this investment?

Suppose you bought a bond with an annual coupon of 9 percent one year ago for $1,160. The bond sells for $1,210 today. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? What was your total nominal rate of return on this investment over the past year? If the inflation rate last year was 7 percent, what was your total real rate of return on this investment?

Answer 2

Question

Chapter 10, Problem 4QAP

A

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total dollar return on investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

B

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total nominal rate of return.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

C

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

The inflation rate is 3%.

To calculate: The real rate of return on the investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

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Answer 3

Question

Chapter 10, Problem 4QAP

A

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total dollar return on investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

B

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total nominal rate of return.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

C

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

The inflation rate is 3%.

To calculate: The real rate of return on the investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

Expert Solution & Answer

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Answer 4

Question

Chapter 10, Problem 4QAP

A

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total dollar return on investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

B

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total nominal rate of return.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

C

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

The inflation rate is 3%.

To calculate: The real rate of return on the investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

Expert Solution & Answer

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Answer 5

Chapter 10, Problem 4QAP

A

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total dollar return on investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

B

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total nominal rate of return.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

C

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

The inflation rate is 3%.

To calculate: The real rate of return on the investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

Answer 6

Chapter 10, Problem 4QAP

A

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total dollar return on investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

Answer 7

Chapter 10, Problem 4QAP

A

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total dollar return on investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

Answer 8

B

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total nominal rate of return.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

Answer 9

B

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

To calculate: The total nominal rate of return.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

Answer 10

C

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

The inflation rate is 3%.

To calculate: The real rate of return on the investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

Answer 11

C

Summary Introduction

Adequate information:

Face value is $1000.

The purchase price is $1010.

The selling price after one year is $1052.

The coupon rate is 4.9%.

The inflation rate is 3%.

To calculate: The real rate of return on the investment.

Introduction: Investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time period.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 10 - Investment Selection Given that Madrigal...Ch. 10 - Investment Selection Given that Sears was down by...Ch. 10 - Risk and Return We have seen that over long...Ch. 10 - Prob. 4CQ Ch. 10 - Effects of Inflation Look at Table 10.1 and Figure...Ch. 10 - Risk Premiums Is it possible for the risk premium...Ch. 10 - Prob. 7CQ Ch. 10 - Returns Two years ago, the Lake Minerals and Small...Ch. 10 - Prob. 9CQ Ch. 10 - Historical Returns The historical asset class...

Solution Summary: The author explains that investors can earn returns from investment in stocks in two forms, i.e., by capital gains due to an increase in stock value in the market or by dividends distributed by the company at a specified time

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Chapter 10 Solutions