Fundamentals Of Corporate Finance, 9th Edition
9th Edition
ISBN: 9781260052220
Author: Richard Brealey; Stewart Myers; Alan Marcus
Publisher: McGraw-Hill Education
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Question
Chapter 11, Problem 1QP
a)
Summary Introduction
To discuss: The average
a)
Expert Solution
Explanation of Solution
The average rate of return of country U large common stocks are 11.4% for the period of 1900 to 2015.
b)
Summary Introduction
To discuss: The average risk premium on big stocks.
b)
Expert Solution
Explanation of Solution
The average risk premium on big stock is 7.6% for the period of 1900 to 2015.
c)
Summary Introduction
To discuss: The market portfolio’s standard deviation of returns.
c)
Expert Solution
Explanation of Solution
The market portfolio’s standard deviation of returns is 19.9% for the period of 1900 to 2015.
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Name the econometric term used for estimating the correlation between today’s stock price and the price of previous days (lag prices).
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Stock Price
# of Shares I
II
A
B
C
D
E
F
$12.00 150,000
$14.00
125,000
$11.00 200,000
$ 22.00 80,000
$8.00
30,000
$29.00 140,000
$12.00
$12.00
$14.00 $14.00
$20.00 $11.00
$ 22,00 $ 22.00
$8.00
$15.00
$29.00 $29.00
Need help
what was the risk premium on common stock each year
2013
2014
2015
2016
2017
what was the average risk premium?
what was the standard deviation of the risk premium?
Chapter 11 Solutions
Fundamentals Of Corporate Finance, 9th Edition
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