Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. An investor purchased a bond 45 days ago for $985. He received $15 in interest and sold the bond for $980. What is the

image text in transcribedimage text in transcribedimage text in transcribed

1. An investor purchased a bond 45 days ago for $985. He received $15 in interest and sold the bond for $980. What is the dollar return on his investment? A 11 B 12 C 13 D 10 E None of the above 2. An investor purchased a bond 45 days ago for $985. He received $15 in interest and sold the bond for $980. What is the holding period return on his investment? A 1.52% B 0.50% C 1.92% D 0.01% E None of the above 3. You purchase a share of Boeing stock for $90. One year later, after receiving a dividend of $3, you sell the stock for $92. What was your holding period return? What is your dollar return? A 4.44%/4 B 2.22%/3 C 3.33%/2 D 5.56%/5 E none of the above 4. Returns for the Company over the last 3 years are shown below. What's the sample standard deviation of its returns? 5. Below are the stock returns for the past five years for a firm: What was the stock's coefficient of variation during this 5-year period? (use sample standard deviation) 6. Calculate the arithmetic average and the geometric average annual return for the two investments below. Calculate the total value of each investment after five years, assume the original cost in each investment is $100,000 and the gains are reinvested. 7. The probability distributions of expected returns for Stock X and Stock Y are as follows: i) What are the expected returns for Stock X and Stock Y ? ii) What are the standard deviations of returns on Stock X and Stock Y ? iii) Which stock should you choose based on coefficient of variation? Consider the portfolio with a current market value of $20 million below. Calculate the expected holding-period return, and the standard deviation of return of this portfolio

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions