Change in Price Index = (121.5 - 120.8)/120.8
Change in Price Index = 5.79%
Change in Stock Price = (110.5 - 100)/100
Change in Stock Price = 10.50%
Real Rate of Stock return = Change in Stock Price - Change in Price Index
Real Rate of Stock Return = 0.1050 - 0.0579
Real Rate of Stock Return = 4.71%
Question 5 (1 point) During a 3-months period, the price index increases from 120.8 to 121.5. During the same period...
Question 4 (1 point) A stock DEF has the following payoffs probabilities: Probability 0.2 0.5 0.3 Payoff $100 $130 $200 What is the Expected Payoff to the stock? Your Answer: Answer Question 5 (1 point) During a 3-months period, the price index increases from 120.8 to 121.5. During the same period, a stock increases in price for $100 to $110.5. What is the real rate of return for the stock for the 3 month period? Express your answer as a...
You can buy a Treasury-bill for $98.75, and in three months the T-bill pays you $100. What is the 3-month Nominal Risk Free Rate? Express your answer as a percentage, for example 3.18% should be entered as 3.18 without the percentage sign.
A stock has a beta of 1.4, the market expected return is 7%, and the riskfree rate is 3%. What is the expected rate of return according to CAPM? Express your answer as a percentage; for example, 3.18% should be entered as 3.18 without the percentage sign.
Question 6 (1 point) A stock has a beta of 2.4, the market expected return is 8% and the riskfree rate is 2%. What is the expected rate of return according to CAPM? Express your answer as a percentage, for example 3.18% should be entered as 3.18 without the percentage sign. Your Answer: Answer Question 7 (1 point) Suppose the covariance between the returns of the stock GHI and the returns to the market is 0.00064 and the standard deviation...
Suppose you hold a stock for seven months. You calculate that your holding period return is 14%. What is your annualized return? Enter your answer as a percentage, without the percent sign. Round your answer to two decimal places. 6.7.0
Mary purchased 100 shares of Sweet Pea Co. stock at a price of $47.84 six months ago. She sold all stocks today for $43.66. During that period the stock paid dividends of $1.21 per share. What is Mary’s effective annual rate? Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) Your Answer:
(1 point) The Capital Asset Price Model (CAPM) is a financial model that attempts to predict the rate of return on a financial instrument such as a common stock, in such a way that it is linearly related to the rate of return on the overal market. Specifically, RStockAd Bo+ PRMarket + e You are to study the relationship between the two variables and estimate the above model: 1,2,, 59 RStock Ad-rate of return on Stock A for month i,...
Question 18 (1 point) Assume that the inflation rate during the last year was 1.97 percent. US government T-bills had the nominal rates of return of 3.54 percent. What is the real rate of return for a T-bill? Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box) Your Answer: Answer units
Refers to the information below: S&R index level today (t=0) 900 Forward price (T=3 months) 918 Annualized 3-month interest rate 8% p.a. Call option Premium (Strike = 900) 62.57 Put option Premium (Strike = 900) 44.92 Dividend Yield 0% S&R index level 3 months later 930 (i) What is your profit 3 months later if you have taken a long position on the stock at t=0? (ii) What is your profit 3 months later if you have taken a short...
Question 18 (3 points) In Year 1, Nominal GDP is $8314 and Price Index is 121. What is Real GDP? (Round to the nearest dollar) Your Answer: Answer