The questions below are dealing with corporate finance and would like some help with solving them!
We have the following information on the shares prices of Papa Smirph Corporation over the last ve years. Calculate the total dollar return and percentage return on each share. Year Papa Smirph share price Annual dividend per share 1 $20 $1.50 2 $25 $1.50 3 $22 $1.50 4 $30 $1.60 5 $32 $1.60 Select one: C a. $12; 60% T, b. $19.7; 61 .5% T, c. $19.7; 98.5% T, (:1. $12; 38.5% T e. $3.94: 15.3% We know that during the last 10 years, the average historical return on a market index is 12%. We also know that the average ination rate and average risk-free rate over the last 10 years are 2% and 5%, respectively. What is the real risk premium using the exact Fisher equation? Select one: A a. 2.94% if b. 6.86% r) c. 7.00% 0 d. 9.30% r) e. 10.00% Given the following share price history, calculate the standard deviation ofthe returns on this stock. Year Share price 1 $35 2 $30 3 $39 4 $42 5 $45 Select one: C? a. 0.18% O b. 5.89% C c. 18.08% C? d. 3.27% Oe.1.81% Which of the following lessons can be learned from studying the history of individual asset returns in the capital market? Select one: A a. Return and risk expectations can and will materialize over time if we wait long enough. A b. There are rewards, in terms of higher risk premiums, for holding risky assets. A c. Arithmetic and geometric average returns would be the same in an efcient nancial market. A d. Unsystematic risk is the risk that is important to the average investor. A e. Excess returns on mutual funds cannot beat excess returns on index funds. What is the geometric average return of a stock with the following share price history? Year Share price 1 $35 2 $30 3 $39 4 $42 5 $45 Select one: A a. 7.95% A b. 7.64% A c. 7.14% A d. 6.84% A e. 6.48% The statement "all information, including 'insider information,' are already priced in the market" describes a market. Select one: A a. weak-form efcient A b. strong-form efcient A c. semi-strong-form efcient A d. stock A e. bond The average historical annual return on a stock is 7.16%, with a standard deviation of 44.35%. What is the 97.5% annual value-at-risk (VaR) on a $1 million investment in this stock? Select one: C a. -$371,900 0 b. -$443,000 (j c. $815,400 C d. -$975,000 C e. -$1,000,000 Research into the performance of mutual funds showed that fund managers have not been able to beat the returns on index funds. This is lends credence to Select one: C a. the argument for market diversication. C b. the argument for centralized regulation ofthe nancial market. 0 c. semi-strong form market efciency. 0 d. strong form market efciency. C e. the non-existence of market anomalies
