Which of the following statements regarding dollar returns and percentage returns is incorrect?

A. If you purchased a 6% bond at par ($1,000) and one year later sold it for $1,050 after receiving the coupons, your dollar return is $80.

B. Your percentage return in A) is 11%.

C. If you purchased a stock for $50 and one year later sold it for $55 after receiving $5 of dividends, your dollar return is $10.

D. Your percentage return in C) is 20%.

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Question 5 of 25

1.0 Points

Calculate the expected return for the following stock?

State (i) Probability (pi) Return (Ri)

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Normal .60 .25

Recession .30 .05

Depression ?? .35

A. 8%

B. 9%

C. 11%

D. 13%

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Question 6 of 25

1.0 Points

Calculate the variance of the stock in Question 5 above.

A. .0285

B. .0336

C. .0457

D. .0491