A) Calculate the nominal and real returns as well as the nominal and real risk premiums...
A) Calculate the nominal and real returns as well as the nominal and real risk premiums for the following corporate bond investment: Purchased for $940 one year ago, 4% coupon rate, sold for $994. The inflation rate was 5.0% and T-bills returned 6%. Show your work.
B) Calculate the expected return, variance, and standard deviation for a portfolio of four equally-weighted stocks with returns of 26.4%, -9.2%, 2.9%, and 22.0%. (Show your work)
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A) Calculate the nominal and real returns as well as the nominal
and real risk premiums...
Calculate the nominal and real returns as well as the nominal and real risk premiums for...
Calculate the nominal and real returns as well as the nominal and real risk premiums for the following corporate bond investment: Purchased for $940 one year ago, 4% coupon rate, sold for $994. The inflation rate was 5.0% and T-bills returned 6%
Calculate the expected return, variance, and standard deviation for a portfolio of four equally-weighted stocks with...
Calculate the expected return, variance, and standard deviation for a portfolio of four equally-weighted stocks with returns of 26.4%, -9.2%, 2.9%, and 22.0%.
Calculations Saved P12-10 Calculating Real Returns and Risk Premiums (LO1) You've observed the following "nominal" returns...
Calculations Saved P12-10 Calculating Real Returns and Risk Premiums (LO1) You've observed the following "nominal" returns on Crash-n-Burn Computer's stock over the past five years: 5 percent. -11 percent, 29 percent, 16 percent, and 12 percent. The average inflation rate over this period was 3.8 percent and the average T-bill rate was 5.25 percent. Requirement 1: What was the average "real" return on Crash-n-Burn's stock? Note: Use the Fisher Effect Formula from the Bond chapter to convert nominal to real...
6. Award: 7.69 points Problem 12-10 Calculating Real Returns and Risk Premiums (L01) You've observed the...
6. Award: 7.69 points Problem 12-10 Calculating Real Returns and Risk Premiums (L01) You've observed the following nominal returns on Regina Computer's stock over the pas five years: 18%, -14%, 20%, 22%, and 10%. suppose the average inflation rate over thi period was 3.1% and the average T-bill rate over the period was 4.4%. a. What was the average real return on Regina's stock? (Do not round intermediate calculations Round the final answer to 2 decimal places.) Average real return...
Problem 10-5 Nominal versus Real Returns [LO 2] Consider the following information on different asset classes...
Problem 10-5 Nominal versus Real Returns [LO 2] Consider the following information on different asset classes from 1926 through 2011. Arithmetic Mean 11.8% 16.5 6.4 Series Large-company stocks Small-company stocks Long-term corporate bonds Long-term government bonds Intermediate-term government bonds U.S. Treasury bills Inflation 6.1 5.5 3.6 3.1 Required: (a) What was the arithmetic average annual return on large-company stocks in nominal terms? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)...
6. 0.50 points Problem 10-10 Calculating Real Returns and Risk Premiums You've observed the following returns...
6.
0.50 points Problem 10-10 Calculating Real Returns and Risk Premiums You've observed the following returns on Yasmin Corporation's stock over the past five years: 16 percent 19 percent, 13 percent, and 10 percent. Suppose the average inflation rate over this periad was 2.2 percent and the average T-bill rale over the period was 5.3 percent. alroun od to 2 decimal pl a. What wras the average real return on Yasmin's stock? (Do not round intenmediate calculations. Enter your answer...
The following table shows the nominal returns on U.S. stocks and the rate of inflation Nominal...
The following table shows the nominal returns on U.S. stocks and the rate of inflation Nominal Return(%) 10.4 8.3 16.0 3.9 Inflation (%) Year 2010 2011 2012 2013 2014 3.5 3.0 3.8 4.6 .2 -37.2 a. What was the standard deviation of the nominal market returns? (Do not make the adjustment for degrees of freedom described in footnote 18.) (Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answer as a percent rounded to 2...
4. Calculating Returns (L01) Suppose you bought a 7 percent coupon bond one year ago for...
4. Calculating Returns (L01) Suppose you bought a 7 percent coupon bond one year ago for $970. The bond sells for $940 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? b. What was your total nominal rate of return on this investment over the past year? c. If the inflation rate last year was 3 percent, what was your total real rate of return on this investment?
The following table shows the nominal returns on US. stocks and the rate of inflation, ㄧ...
The following table shows the nominal returns on US. stocks and the rate of inflation, ㄧ Year Nominal Return (%) Inflation (%) 12.0 7.8 172 7.7 -43.5 2.4 3.2 4.0 4.3 .2 2010 2011 2014 a. What was the standard deviation of the nominal market returns? (Do not make the adjustment for degrees of freedom described in footnote 18) (Use decimals, not percents, in your caleulations. Do not round intermediate calculations. Enter your answer as a percent rounded to 2...
The following premiums apply to a 6 month bond: interest rate risk premium = 0.22 percent;...
The following premiums apply to a 6 month bond: interest rate risk premium = 0.22 percent; real rate = 3.50 percent; default premium = 0.12 percent; inflation premium = 1.45 percent. What is the expected difference in nominal interest rates between a 6-month risky security and a 6 month, default free security? PLZ show work and explanation
Calculations Saved P12-10 Calculating Real Returns and Risk Premiums (LO1) You've observed the following "nominal" returns on Crash-n-Burn Computer's stock over the past five years: 5 percent. -11 percent, 29 percent, 16 percent, and 12 percent. The average inflation rate over this period was 3.8 percent and the average T-bill rate was 5.25 percent. Requirement 1: What was the average "real" return on Crash-n-Burn's stock? Note: Use the Fisher Effect Formula from the Bond chapter to convert nominal to real...
6. Award: 7.69 points Problem 12-10 Calculating Real Returns and Risk Premiums (L01) You've observed the following nominal returns on Regina Computer's stock over the pas five years: 18%, -14%, 20%, 22%, and 10%. suppose the average inflation rate over thi period was 3.1% and the average T-bill rate over the period was 4.4%. a. What was the average real return on Regina's stock? (Do not round intermediate calculations Round the final answer to 2 decimal places.) Average real return...
Problem 10-5 Nominal versus Real Returns [LO 2] Consider the following information on different asset classes from 1926 through 2011. Arithmetic Mean 11.8% 16.5 6.4 Series Large-company stocks Small-company stocks Long-term corporate bonds Long-term government bonds Intermediate-term government bonds U.S. Treasury bills Inflation 6.1 5.5 3.6 3.1 Required: (a) What was the arithmetic average annual return on large-company stocks in nominal terms? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)...
6.
0.50 points Problem 10-10 Calculating Real Returns and Risk Premiums You've observed the following returns on Yasmin Corporation's stock over the past five years: 16 percent 19 percent, 13 percent, and 10 percent. Suppose the average inflation rate over this periad was 2.2 percent and the average T-bill rale over the period was 5.3 percent. alroun od to 2 decimal pl a. What wras the average real return on Yasmin's stock? (Do not round intenmediate calculations. Enter your answer...
The following table shows the nominal returns on U.S. stocks and the rate of inflation Nominal Return(%) 10.4 8.3 16.0 3.9 Inflation (%) Year 2010 2011 2012 2013 2014 3.5 3.0 3.8 4.6 .2 -37.2 a. What was the standard deviation of the nominal market returns? (Do not make the adjustment for degrees of freedom described in footnote 18.) (Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answer as a percent rounded to 2...
4. Calculating Returns (L01) Suppose you bought a 7 percent coupon bond one year ago for $970. The bond sells for $940 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? b. What was your total nominal rate of return on this investment over the past year? c. If the inflation rate last year was 3 percent, what was your total real rate of return on this investment?
The following table shows the nominal returns on US. stocks and the rate of inflation, ㄧ Year Nominal Return (%) Inflation (%) 12.0 7.8 172 7.7 -43.5 2.4 3.2 4.0 4.3 .2 2010 2011 2014 a. What was the standard deviation of the nominal market returns? (Do not make the adjustment for degrees of freedom described in footnote 18) (Use decimals, not percents, in your caleulations. Do not round intermediate calculations. Enter your answer as a percent rounded to 2...
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