SA HW5E

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University of Maryland Global Campus (UMGC) *

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330

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Finance

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Feb 20, 2024

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HW5E (HPR, APR, EAR, Arithmetic mean and geometric mean of returns) Question 1 The prices for the White Swan Corporation for the first quarter of the last year are given below. Find the holding period return (percentage return) for February. End of the month Stock price January 94.02 February 90.35 March 108.22 Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) Your Answer: -3.90% Solution: Question 2 You purchased 100 shares of General Motors stock at a price of $98.99 one year ago. You sold all stocks today for $102.76. During the year, the stock paid dividends of $5.79 per share. What is your holding period return? Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) . Your Answer: 9.66% Solution:
HW5E (HPR, APR, EAR, Arithmetic mean and geometric mean of returns) Question 3 You purchased 300 shares of General Electric stock at a price of $61.56 four years ago. You sold all stocks today for $69.92. During that period the stock paid dividends of $3.91 per share. What is your annualized holding period return (annual percentage rate)? Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) Your Answer: 4.98% Solution: Question 4 John purchased 100 shares of Black Forest Inc. stock at a price of $155.95 three months ago. He sold all stocks today for $160.90. During this period the stock paid dividends of $6.19 per share. What is John’s annualized holding period return (annual percentage rate)? Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) Your Answer: 28.57% Solution:
HW5E (HPR, APR, EAR, Arithmetic mean and geometric mean of returns) Question 5 Mary purchased 100 shares of Sweet Pea Co. stock at a price of $49.42 six months ago. She sold all stocks today for $47.55. During that period the stock paid dividends of $1.40 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: -1.89% Solution: Question 6 Calculate the arithmetic average return, given annual returns of: Year 1 9.60% Year 2 7.40% Year 3 -14.55% Year 4 11.52% Year 5 9.87%
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HW5E (HPR, APR, EAR, Arithmetic mean and geometric mean of returns) Round the answer to two decimals places in percentage form. Please write % sign in the "units" box. Your Answer: 4.77% Solution: Question 7 Calculate the Geometric average return, given annual returns of: Year 1 8.48% Year 2 7.69% Year 3 -12.73% Year 4 8.49% Year 5 5.98% Round the answer to two decimals places in percentage form. Please write % sign in the "units" box. Your Answer: 3.23% Solution: