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Finance Assignment Misc. Problems




Question;Four months ago, you purchased 1,300 shares of Lakeside Bank stock for $19.08 a share. You have received dividend payments equal to$.58 a share. Today, you sold all of your shares for $20.08 a share. What is your total dollar return on this investment?Last year, you purchased a stock at a price of $51.5 a share. Over the course of the year, you received $2 in dividends and inflationaveraged 2.8 percent. Today, you sold your shares for $54.5 a share. What is your approximate real rate of return on this investment (note:normally you would use the "Fisher Effect Formula", but in this case please use the "approximation formula"?A stock had returns of 8 percent, -4 percent, 2 percent, and 14 percent over the past four years. What is the standard deviation of thesereturns?A stock has returns of 3 percent, 20 percent, -25 percent, and 14 percent for the past 4 years. Based on this information, what is the 95percent probability range for any one given year?Suppose you bought a 15 percent coupon bond one year ago for $1,030. The bond sells for $1,085 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 9 percent, what was your total real rate of return on this investment? (Do not roundintermediate calculations.)Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 4 percent, -12 percent, 25percent, 22 percent, and 14 percent. The average inflation rate over this period was 3.6 percent and the average T-bill rate was5.5 percent.-What was the average real return on Crash-n-Burns stock? (Do not round intermediate calculations.)-What was the average nominal risk premium on Crash-n-Burns stock? (Do not round intermediate calculations.)If the economy booms, RTF, Inc. stock is expected to return 12 percent. If the economy goes into a recessionary period, then RTF isexpected to only return 4 percent. The probability of a boom is 62 percent while the probability of a recession is 38 percent. What is thevariance of the returns on RTF, Inc. stock?8.You own the following portfolio of stocks. What is the portfolio weight of stock C?StockABCD9.Number of Shares80540400220Price per Share$20$18$40$33What is the beta of the following portfolio?StockABCAmount Invested$2,000$3,000$5,500Security Beta1.201.610.8410. The risk-free rate of return is 3 percent and the market risk premium is 10 percent. What is the expected rate of return on a stock with a betaof 1.28?11. The common stock of Jensen Shipping has an expected return of 14.64 percent. The return on the market is 11 percent and the risk-free rateof return is 4.5. What is the beta of this stock?12. Which one of the following stocks is correctly priced if the risk-free rate of return is 2.4 percent and the market risk premium is7.70 percent?StockABCDEBeta0.731.491.401.060.98Expected Return8.52%13.90%13.18%10.57%9.90%13. Consider the following information:State of EconomyRecessionNormalBoomProbability of State ofEconomy0.110.350.54Required:Calculate the expected return.14. Consider the following information:Rate of Return if StateOccurs- of Return if State OccursProbability ofState of EconomyState of EconomyStock AStock BStock CBoom. portfolio is invested 26 percent each in A and C, and 48 percent in B. What is the expected return of the portfolio? (Do notround your intermediate calculations.)(b) What is the variance of this portfolio? (Do not round your intermediate calculations.)(c) What is the standard deviation? (Do not round your intermediate calculations.)


Paper#48302 | Written in 18-Jul-2015

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