need answers for c-i. show formulas and no excell work please.
Question 1. (27 marks) You have been following the prices of Stock A and recording the following information: Adj Date Open High Low Close Dividend Volume Close 01-Jul-20 62.50 62.50 61.35 61.75 61.75 0.625 27,454,900 01-Jun-20 62.90 64.35 61.32 61.90 61.28 35,919,800 01-May-20 63.37 64.69 61.33 62.71 62.09 31,563,300 01-Apr-20 61.61 64.40 60.78 63.38 62.75 0.625 28,179,500 01-Mar-20 61.41 62.80 60.54 61.37 60.15 43,585,500 01-Feb-20 61.55 62.88 60.35 61.06 59.85 34,410,600 01-Jan-20 60.83 65.24 60.28 61.39 60.17 1.130 30,801,200 01-Dec-19 61.00 62.84 58.12 60.54 58.25 35,638,500 01-Nov-19 60.91 61.73 57.36 60.33 58.05 58,022,600 01-Oct-19 62.52 63.00 60.11 60.72 58.42 0.565 21,743,700 01-Sep-19 59.51 63.41 58.98 62.31 59.41 0.565 30,764,200 01-Aug-19 60.09 62.44 58.76 59.47 56.17 30,263,900 01-Jul-19 59.06 61.44 58.15 60.54 57.18 43,506,900 Remember to show all of your work * a. Using the adjusted close, calculate the ex-post returns for stock A for each period. (6 marks) Ex-post returns for Stock A = (end price + sum of all dividends)/ opening price-1 End price = 61.75 Sum of all dividends = 0.625 +0.625 + 1.13 +0.565 +0.565 = 3.51 Opening price = 57.18 Ex-post returns for stock A= [(61.75+3.51)/(57.18)] -1 = 0.1413 = 14.13% b. Calculated the arithmetic mean for stock A. (2 marks) = sum of Adj Close / No. of period = 775.52/13 = 59.6553 c. Calculate the geometric mean for stock A. (3 marks) d. Calculate the standard deviation or the risk associated with stock A. (3 marks) There are a couple of methods available - choose 1. e. Based upon your calculations, what do you think the expected price will be on August 1 and what assumptions did you make to arrive at this expected price? (4 marks) f. What form of market efficiency did you use to calculate the expected price? Explain. (2 marks) 8. You were listening to the news at supper time and you heard a report of a pending new product that company A will introduce to the market next week that will change the company's product offering. Will this information have a potential of changing your estimate that you provided in part e? Explain. (3 marks) h. What form of market efficiency did you incorporate in part g? Explain. (2 marks) i. If the market is strong form efficient, would your expected price estimate change? Explain (2 marks) Question 1. (27 marks) You have been following the prices of Stock A and recording the following information: Adj Date Open High Low Close Dividend Volume Close 01-Jul-20 62.50 62.50 61.35 61.75 61.75 0.625 27,454,900 01-Jun-20 62.90 64.35 61.32 61.90 61.28 35,919,800 01-May-20 63.37 64.69 61.33 62.71 62.09 31,563,300 01-Apr-20 61.61 64.40 60.78 63.38 62.75 0.625 28,179,500 01-Mar-20 61.41 62.80 60.54 61.37 60.15 43,585,500 01-Feb-20 61.55 62.88 60.35 61.06 59.85 34,410,600 01-Jan-20 60.83 65.24 60.28 61.39 60.17 1.130 30,801,200 01-Dec-19 61.00 62.84 58.12 60.54 58.25 35,638,500 01-Nov-19 60.91 61.73 57.36 60.33 58.05 58,022,600 01-Oct-19 62.52 63.00 60.11 60.72 58.42 0.565 21,743,700 01-Sep-19 59.51 63.41 58.98 62.31 59.41 0.565 30,764,200 01-Aug-19 60.09 62.44 58.76 59.47 56.17 30,263,900 01-Jul-19 59.06 61.44 58.15 60.54 57.18 43,506,900 Remember to show all of your work * a. Using the adjusted close, calculate the ex-post returns for stock A for each period. (6 marks) Ex-post returns for Stock A = (end price + sum of all dividends)/ opening price-1 End price = 61.75 Sum of all dividends = 0.625 +0.625 + 1.13 +0.565 +0.565 = 3.51 Opening price = 57.18 Ex-post returns for stock A= [(61.75+3.51)/(57.18)] -1 = 0.1413 = 14.13% b. Calculated the arithmetic mean for stock A. (2 marks) = sum of Adj Close / No. of period = 775.52/13 = 59.6553 c. Calculate the geometric mean for stock A. (3 marks) d. Calculate the standard deviation or the risk associated with stock A. (3 marks) There are a couple of methods available - choose 1. e. Based upon your calculations, what do you think the expected price will be on August 1 and what assumptions did you make to arrive at this expected price? (4 marks) f. What form of market efficiency did you use to calculate the expected price? Explain. (2 marks) 8. You were listening to the news at supper time and you heard a report of a pending new product that company A will introduce to the market next week that will change the company's product offering. Will this information have a potential of changing your estimate that you provided in part e? Explain. (3 marks) h. What form of market efficiency did you incorporate in part g? Explain. (2 marks) i. If the market is strong form efficient, would your expected price estimate change? Explain (2 marks)
