20. The rate of return,
= (P2 - P1 + Dividend) / P1 * 100
= ($ 54 - $55 + $2) / $55 * 100
= 1.8182%
The nominal return = real rate of return + inflation
1.8182% = real rate of return + 3%
Real rate of return is = -1.1818%
20. You buy a stock for $55 today, and sell the stock one year later for $54, during which time a $2 dividend is pa...
20. You buy a stock for $55 today, and sell the stock one year later for $54, during which time a $2 dividend is paid. What is your nominal return on this stock? Bonus (+1): If inflation is 3%, what is your real rate of return (Change in purchasing power)?
20. You buy a stock for $55 today, and sell the stock one year later for $54, during which time a $2 dividend is paid. What is your nominal return on this stock? Bonus (+1): If inflation is 3%, what is your real rate of return (Change in purchasing power)?
3. If you buy a stock at $32 and sell it 4 years later at $45, what is your annual HPY? (5) 4. Bonus: If the stock in Problem #3 paid an annual dividend of $1, what would be the rate of return? (5)
What is the holding period return buy stock at $32 sell it one year later at 30 and receive a dividend of 1.25
20. Assume that you plan to buy a share of ABC stock today and to hold it for 3 years. Your expectations are that you will not receive a dividend at the end of Year 1 and 2, but you will receive a dividend at the end of Year 3. In addition, you expect to sell the stock for $100 at the end of Year 3. The stock recently paid a dividend of $7. If your required rate of return...
To trade in stocks, a brokerage commission of 1% of the stock price is charged. However, if you buy the stock and later sell it, or you short sell the stock and later buy, assume that you pay the brokerage commission only one time at the beginning. If the stock price is $75 and the continuously compounded interest rate is 5%, what is arbitrage-free price range of the nine-month forward price?A. $76.15 and $77.24B. $76.89 and $78.84C. $77.08 and $78.64D. ...
7. An investor buys some land for $40,000 and sells it 12 years later for $115,000. at the time of sale was 26%. Inflation during this time was 4% per year. growth rate of return for this investment? (10 points) The tax rate for gains What is the annual real You have a new job as an engineer and would like to buy a condominium in 4 years. real estate listings for the city where you live and condos similar...
You purchased a share of stock for $20. One year later you received $1 as dividend and sold the share for $24. Your total return was __________. A) 25 percent B) 10 percent C) 20 percent D) 5 percent
Suppose you buy stock at a price of $33 per share. 4 months later, you sell it for $38. You also received a dividend of $0.64 per share. What is your annualized percentage return on this investment?
5. (20). Assume that the (nominal) exchange rates b/w US and UK one year ago was $1.25/£ and currently the rate is $1.20/£ . Also, inflation rates during the year in US and UK were respectively 2% and 3%. Answer the following questions a. What was the percentage change in the (nominal) value of the pound? b. What the (nominal) exchange rate should be today if the RPPP (relative purchasing parity) holds? c. What was the percentage change in the...