FINANCE returns/yields

1.value:

10.00 points

Suppose a stock had an initial price of $64 per share, paid a dividend of $1.40 per share during the year, and had an ending share price of $76.

Compute the percentage total return. (Round your answer to 2 decimal places. (e.g., 32.16))

Total return %

2.value:

10.00 points

Suppose a stock had an initial price of $50 per share, paid a dividend of $0.80 per share during the year, and had an ending share price of $60.

What was the dividend yield and the capital gains yield? (Round your answers to 2 decimal places. (e.g., 32.16))

Dividend yield %

Capital gains yield %

3.value:

10.00 points

Suppose a stock had an initial price of $80 per share, paid a dividend of $0.60 per share during the year, and had an ending share price of $72.

Compute the percentage total return. (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16))

Total return %

What was the dividend yield and the capital gains yield? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16))

Dividend yield %
Capital gains yield %

4.value:

10.00 points

Suppose you bought a 7.6 percent coupon bond one year ago for $840. The bond sells for $885 today.

a.

Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?

Total dollar return $

b.

What was your total nominal rate of return on this investment over the past year? (Round your answer to 2 decimal places. (e.g., 32.16))

Nominal rate of return %

c.

If the inflation rate last year was 2.5 percent, what was your total real rate of return on this investment? (Round your answer to 2 decimal places. (e.g., 32.16))

Real rate of return %

5.value:

10.00 points

Returns

Year X Y

1 14 % 18 %

2 28 29

3 9 10

4 – 21 – 26

5 10 20

Using the returns shown above, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. (Round your percent answers to 2 decimal places. (e.g., 32.16) and variances to 5 decimal places. (e.g., 32.16161))

X Y

Average returns % %

Variances

Standard deviations % %

6.value:

10.00 points

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 13 percent, –8 percent, 16 percent, 16 percent, and 10 percent.

a.

What was the arithmetic average return on Crash-n-Burn’s stock over this five-year period? (Round your answer to 1 decimal place. (e.g., 32.1))

Average return %

b-1

What was the variance of Crash-n-Burn’s returns over this period? (Round your answer to 5 decimal places. (e.g., 32.16161))

Variance

b-2

What was the standard deviation of Crash-n-Burn’s returns over this period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Standard deviation %

7.value:

10.00 points

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 13 percent, –13 percent, 20 percent, 25 percent, and 10 percent. Suppose the average inflation rate over this period was 3.0 percent and the average T-bill rate over the period was 3.3 percent.

a.

What was the average real return on Crash-n-Burn’s stock? (Round your answer to 2 decimal places. (e.g., 32.16))

Average real return %

b.

What was the average nominal risk premium on Crash-n-Burn’s stock? (Round your answer to 1 decimal place. (e.g., 32.1))

Average nominal risk %

8.value:

10.00 points

You bought one of Great White Shark Repellant Co.’s 8 percent coupon bonds one year ago for $1,059. These bonds make annual payments and mature 10 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 7 percent.

If the inflation rate was 4.8 percent over the past year, what was your total real return on investment? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Total real return %

9.value:

10.00 points

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 10 percent, –11 percent, 18 percent, 19 percent, and 10 percent. Suppose the average inflation rate over this period was 2.2 percent and the average T-bill rate over the period was 4.7 percent.

What was the average real risk-free rate over this time period? (Round your answer to 2 decimal places. (e.g., 32.16))

Average real risk-free rate %

What was the average real risk premium? (Round your answer to 2 decimal places. (e.g., 32.16))

Average real risk premium %

10.value:

10.00 points

A stock has had returns of 10 percent, 17 percent, 26 percent, −14 percent, 24 percent, and −9 percent over the last six years.

What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

Arithmetic return %

Geometric return %