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MINOR Probl ) The closing stock price for Firm A on December 31 of the last four years was: 1996 20, 1997-24; 1998 = 16;

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MINOR Probl ) The closing stock price for Firm A on December 31 of the last four years was: 1996 20, 1997-24; 1998 = 16; 199932. Firm A does not pay dividends. 0) points a. Calculate the HPRs for the three periods: 1996-97; 197-98, and, 1998-99 b. Calculate the arithmetic mean return c. Calculate the geometric mean return of these three historical returns d. If you invested $10,000 on 12/31/1996, what would be the value of your investment on 12/31/1999? 7. An investor invests 50% of her investment budget in a risky asset that has an expected rate of return of 15% and a variance of 5%. She invests the remaining percentage of her budget in a Treasury bill that pays 5%. Compute the portfolio's expected rate of return and standard deviation 8. You are a financial planner. One of your Ultra High-Net Worth (UHNW) clients is in the 40% combined federal plus state income tax bracket. Your client asks for your recommendation regarding the choice between two bonds that are identical except for the annual yield offered to investors, i.e., i) Philadelphia Municipal Bond offering investors an annual tax-free yield of 3%, and ii) taxable Corporate Bond offering investors an annual taxable yield of 4.29%. Which bond would you recommend to your client? Briefly explain the basis for your recommendation 9: Suppose you are a Treasury Note dealer. A customer places an order to purchase ONE US Treasury Note that will mature on May 15 2017. Use the Wall Street Journal T-Note market data to answer questions (a) and (b) below. Recall that the par (face) value of a T-Note is $1000.00 MATURITY DATE BID 1% of Par) ASKED 1% of Par)CHANGED ASKED YIELD to URT 0.927 109.3750 0.0234 109.3516 2017 May 15 a) What price willyou receive from your custome? (b) What is your profit on this transaction, assuming you just purchased one US Treasury Note from another customer

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