1.
Nominal Return = (54 - 55 + 2)/55
Nominal Return = 1.82%
2.
Real Rate of Return = 0.0182 - 0.03
Real Rate of Return = -1.18%
20. You buy a stock for $55 today, and sell the stock one year later for...
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. ...
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...
You buy 100 shares of Apple common stock at a price of $63.93. One quarter later, you collect a dividend of $1.14 per share and sell your stock for $69.49 per share. What is the rate of return on your investment? (You may ignore commissions and taxes.) Do not round at intermediate steps in your calculation. Express your answer in percent. Round to two decimal places. Do not type the % symbol. If the return is negative, then include a...
Suppose you buy stock at a price of $65 per share. Five months later, you sell it for $69. You also received a dividend of $0.72 per share. What is your annualized return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Annualized return %