I am having difficulty trying to understand these Problems I need a tutor to HELP me understand and solve these highlighted Questions in detail and step by step.
6-1) a. b. c.
6-2).(use table 6-1)
6-4).(use table 6-6)
6-9).
6-14). (use table 6-6)
I toke a picture of the table they are provided at bottom with picture
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tion in Figure 6-2. 6-14 Assume that Treasury bonds continued to have a geometric mean as shown in Table 6-6 until 100 years have elapsed. Calculate the cumulative ending wealth per $1 invested for this 100-year period. 6-15 Assume that over the period 1926-2010 the geometric mean rate of return for Treasury bonds was 5.4 percent. The corresponding number for the rate of inflation was 3 percent. Calculate, two different ways, the cumulative wealth index for government bonds for the period, on an inflation-adjusted basis. 6-16 Using the returns for the years 1926-1931 from Table 6-1, determine the geometric mean for this period. Show how the same result can be obtained from the ending alue for 1931 of 0.7405.TABLE 6-1 (continued) Year Index Value Dividend Return (%) Year Index Value Dividend Return (%) 1968 103.86 3,07 10.84 1992 435.71 12.38 7.43 1969 92.06 3.16 -8.32 1993 466.45 12.58 9.94 1970 92.15 3.14 3.51 1994 459.27 13.18 1.29 1971 102.09 3.07 14.12 1995 615.93 13.79 37.1 1 1972 1 18.05 3.15 18.72 1996 740.74 1490 22.68 1973 97.55 3.38 -14.50 1997 970.43 15,50 33.10 1974 68.56 3,60 -26.03 1998 1229.23 16.20 28.34 1975 90.19 3.68 36.92 1999 1469.25 16.48 20.87 1976 107.46 4.05 23.64 2000 1320.28 16.27 -9.03 1977 95.1 4.67 -7.16 2001 1 148.08 15.74 -11.85 1978 96.11 5.07 6.39 2002 879.82 16.07 -21.97 1979 107.94 5.65 18.19 2003 1111.92 17.39 28.36 1980 135.76 6.16 31.48 2004 1211.92 19.44 10.74 1981 122.55 6.63 -4.85 2005 1248.29 22.22 4.83 1982 140.64 6.87 20.37 2006 1418.3 24.88 15.61 1983 164.93 7.09 22,31 2007 1468.36 27.73 5.48 1984 167.24 7.53 5.97 2008 903.25 28.39 -36.55 1985 21 1.28 7.90 31.06 2009 11 15.1 22.41 25.94 1986 242.17 8.28 18.54 2010 1257.64 22.73 14.82 1987 247.08 8.81 5,67 2011 1257.6 26.43 1988 277.72 2012 1426.19 2.10 9.73 16.34 31.25 15.89 1989 353.4 1 1.05 31.23 2013 1848.36 34.99 32.05 1990 330.22 12.10 -3.14 2014 2058.9 39.44 1991 13.52 417.09 12.20 30.00 ry the TR concept, which is traditTHE RETURNS AND RISKS FROM INVESTING TABLE 6-6 Summary Statistics of Annual Returns for Major Financial Assets for 85 Years, January I, 1926-December 31, 2010 Arithmetic Geometric Mean Std. Dev. Mean Returns summary S&P 500 Composite 1 1.5% 19.9% 9.6% Aaa Corporate Bond 6.3 8.5 5.9 US Treasury Bond 5.8 9.2 Treasury bill 5.4 3.7 3.0 Inflation 3.1 3.6 4.2 Source: Jack W. Wilson and Charles P. Jones. 3.06-1 Calculate the return and the return relative for the following assets: a. A preferred stock bought for $70 per share, held one year during which $5 per share dividends are collected, and sold for $63 b. A warrant bought for $1 1 and sold three months later for $13 c. A 12 percent bond bought for $870, held two years during which interest is col- lected, and sold for $930 6-2 Calculate the arithmetic and geometric mean return for the S&P 500((Table 6-1) for the years 2000-2002. How does this change when 2003 is included? 6-3 Calculate the index value for the S&P 500 (Table 6-1) assuming a $1 investment at the beginning of 1980 and extending through the end of 1989. Using only these index values, calculate the geometric mean for these years. 6-4 Assume that one of your relatives, on your behalf, invested $100,000 in a trust holding S&P 500 stocks at the beginning of 1926. Using the data in Table 6-6, determine the value of this trust at the end of 2010. 6-5 Now assume that your relative had invested $100,000 in a trust holding "small stocks" at the beginning of 1926. Determine the value of this trust at the end of 2010. 6-6 What if your relative had invested $100,000 in a trust holding long-term Treasury bonds at the beginning of 1926. Determine the value of this trust at the end of 2010. 6-7 Finally, what if this relative had invested $100,000 in a trust holding Treasury bills at the beginning of 1926. Determine the value of this trust by the end of 2010. 6-8 Calculate cumulative wealth for corporate bonds for the period 1926-2010, using a geometric mean of 5.9 percent (85-year period). 6-9 Given a cumulative wealth index for Treasury bills of $20.21 for the period 1926- 2010, calculate the geometric mean
