Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose you bought a bond with an annual coupon rate of 7.3 percent one year ago for $896. The bond sells for $924 today. o.

image text in transcribed
image text in transcribed
Suppose you bought a bond with an annual coupon rate of 7.3 percent one year ago for $896. The bond sells for $924 today. o. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? Note: Do not round intermediate colculations and round your answer to the nearest whole number, e.g., 32. b. What was your total nominal rate of return on this investment over the past year? Note: Do not round intermediate calculations and enter your answer as o percent rounded to 2 decimal places, e.g., 32.16. c. If the inflation rate last year was 4.3 percent, what was your total real rate of return on this investment? Note: Do not round intermediate colculotions ond enter your answer as o percent rounded to 2 decimal places, e.g., 32.16. You've observed the following returns on Pine Computer's stock over the past five years: -24.9 percent, 13.6 percent. 30.2 percent. 23 percent, and 213 percent. a. What was the arithmetic average return on the stock over this five-ycar period? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.9., 32.16 . b. What was the variance of the returns over this pertod? Note: Do not round intermediate calculotions and round your answer to 6 decimal places, e.9., 161616 . c. What was the standard deviation of the returns over this period? Note: Do not round intermediate colculations and enter your onswer os a percent rounded to 2 decimal places, e.g, 32.16

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

Recommended Textbook for

Finance Applications And Theory

Authors: Marcia Millon Cornett, John R. Nofsinger, Troy Adair

3rd International Edition

1259252221, 9781259252228

More Books

Students also viewed these Finance questions