Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 8, Problem 8.16E
Exercise 8.16
LO 3
Ex-dividend date-market price effect Find a list of common stock ex-dividend date data. You can go, via Google, to wsj.co m . Under the Markets tab, select Market Data; then click on the arrow next to U.S. Stocks to open the pull down menu and select Dividends under the Stocks and Trading Statistics category. Scroll down to the Dividend Declarations Table, which includes the relevant ex-dividend dates. Select several stocks, preferably of large and well-known companies. Go to a stock listing on the ex-dividend date and determine what happened to the market price of a share of stock on that date. Does this price action make sense? Explain your answer.
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Question one
Suppose you have the following information from Muscat stock market
Stock
Share outstanding
Base day Closing price
Second day closing price
Salalah company
18
3
2.8
Dhofar power company
26
2.8
3.1
Oman company
10
4.1
2.1
Dhofar bank
28
3
1.8
Calculate
1. Price weighted index
2. Value weighted index
plz show steps
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« Question 36 of 50
Which of the following statements is CORRECT?
O a. Money markets are markets for long-term debt and common stocks.
O b. Money market mutual funds usually invest their money in a well-diversified portfolio of liquid common stocks.
O c. The NYSE operates as an auction market, whereas NASDAQ is an example of a dealer market.
d. While the distinctions are becoming blurred, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise capital from other partles.
O e. A liquid security is a security whose value is derived from the price of some other "underlying" asset.
N
W.
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Question 6
Consider a market in which the returns on common stocks are described by the Fama-French
Three Factor Model. The following table gives the factor sensitivities of Orange, Inc,
Fallmart, and Vesla| Inc. stocks to each of the three factors.
Security
BSp500
BSMB
Sensor, Inc.
1.5
-1.5
Contravent, Inc. 0.5
0.5
-0.5
Cosmo, Inc.
1.3
1.1
-0.8
a. Consider a portfolio, made up by selling short $10,000 of Contravent stocks and
buying $10,000 of Sensor and $5000 of Cosmo. How sensitive will this portfolio
be to each of the three factors?
b. What is the expected return of your portfolio in (a) if the expected return on the
S&P 500 index is 15%, the expected return on the SMB factor is 4%, the
expected return on the HML factor is 2% and the risk free rate is 0.5%
c. What is the systematic volatility (standard deviation of returns) of your portfolio
in (a) given that the volatility of the S&P 500 index is 16%, the volatility of the
SMB factor is 20% and the volatility of HML factor is 10%?
Chapter 8 Solutions
Accounting: What the Numbers Mean
Ch. 8 - Prob. 8.1MECh. 8 - Mini-Exercise 8.2 LO 2 Preferred stock-calculate...Ch. 8 - Prob. 8.3MECh. 8 - Mini-Exercise 8.4 LO 6 Treasury stock transactions...Ch. 8 - Prob. 8.5ECh. 8 - Exercise 8.6 Review exercise-calculate net income...Ch. 8 - Prob. 8.7ECh. 8 - Exercise 8.8 Review exercise-calculate retained...Ch. 8 - Prob. 8.9ECh. 8 - Prob. 8.10E
Ch. 8 - Prob. 8.11ECh. 8 - Prob. 8.12ECh. 8 - Prob. 8.13ECh. 8 - Prob. 8.14ECh. 8 - Exercise 8.15 LO 3 Dividend dates-market price...Ch. 8 - Exercise 8.16 LO 3 Ex-dividend date-market price...Ch. 8 - Prob. 8.17ECh. 8 - Prob. 8.18ECh. 8 - Prob. 8.19ECh. 8 - Prob. 8.20ECh. 8 - Prob. 8.21ECh. 8 - Prob. 8.22ECh. 8 - Prob. 8.23PCh. 8 - Prob. 8.24PCh. 8 - Prob. 8.25PCh. 8 - Prob. 8.26PCh. 8 - Prob. 8.27PCh. 8 - Problem 8.28 LO 1, 2, 4, 6 Transaction...Ch. 8 - Problem 8.29 LO 1, 2, 4, 6 Transaction...Ch. 8 - Problem 8.30 LO 1. 2, 4, 6 Transaction...Ch. 8 - Prob. 8.31PCh. 8 - Prob. 8.32PCh. 8 - Prob. 8.33CCh. 8 - Prob. 8.34CCh. 8 - Prob. 8.35CCh. 8 - Case 8.36 LO 1, 2, 7 Capstone analytical review of...
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