65. At the beginning of the slide, you were asked to derive the annualize rate ofreturn for the U.S. stock market. In 2016 the value was 23.6 trillion and in 2018 itwas 30.1 trillion. So what is the annualized RR?Select one:O a. 6.50%O b. 27.54%O c. 30.10%O d. 13.77%

The annualized return is the method of calculating the rate of return an investment earned in the…

Answered: 65. At the beginning of the slide, you…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A stock price P0=$23, and is expected to pay D1 = $1.242 one year from now and to grow at a constant rate of g=8% in the future. Suppose this analysis was conducted in January 1, 2002, what is the expected price at the end of 2002 and what is the Capital gains yield?
Assume that in 2020, a Liberty Seated half dollar issued in 1890 was sold for $197,000. What was the rate of return on this investment? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
The yearly rates of return for a stock are 0 .15, -0.04, .05, -0.07, 0.24, 0.03. In the following your answers should be correct to 3 places after the decimal point. The Compound Rate of Return per annum compounded annually is
The level of the Syldavian market index is 23,000 at the start of the year and 27,500 at the end. The dividend yield on the index is 5.5%. What is the return on the index over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) If the interest rate is 8%, what is the risk premium over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) If the inflation rate is 9%, what is the real return on the index over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
If the stock market index is at a level of 1,120 and the one-year forward on the index is 1,210, what is the implied repo rate in continuously-compounded terms (assuming zero dividends on the index)? (a) 5.72% (b) 6.52% (c) 7.72% (d) 8.62%
Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market Return (%) T-Bill Return (%) 2013 35.90 0.21 2014 15.20 0.21 2015 -5.10 0.21 2016 16.90 0.08 2017 25.90 0.10 a. What was the risk premium on common stock in each year? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Year Risk Premium 2013 % 2014 % 2015 % 2016 % 2017 % b. What was the average risk premium? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
The level of the Syldavian market index is 21,600 at the start of the year and 26,100 at the end. The dividend yield on the index is 4.3%. a. What is the return on the index over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. If the interest rate is 5%, what is the risk premium over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. If the inflation rate is 7%, what is the real return on the index over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Roundall dollar answers to 2 decimal places and record all interest rate, coupon rate and growth rate answers as a percentrounded to one decimal place. 26. The historical stock returns for GAF, Inc. are listed below: Year -Annual Stock Return2013 -12%2014 14%2015 35%2016 2%2017 -16%2018 8%2019 0%2020 34%2021 12%2022 6% What is the standard deviation of returns for GAF, Inc. stock over the 10-year time period? (Compute the standard deviation assuming this is a population of returns, not a sample – that is, use the procedure describedin the textbook for calculating the standard deviation of a series of stock returns).27. The end of year stock price and the dividend paid each year for Maxwell, Inc. stock for years 0 through 6 arelisted in the table below: Year -End of Year Stock Price- Dividend0 $12.00 $ 01 $14.86 $1.802 $7.95 $1.883 $8.00…
What will price be in 1 year? c. What do you expect to happen to price in the following year? (Round your dollar value to 2 decimal places.) d. What is your estimate of DEQS’s intrinsic value per share if you expected DEQS to pay out only 10% of earnings starting in year 6? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
You inverted $10,000 in a large U.S. stocks at the beginning of 2016 and earned 6% in 2016, 2.0% in 2017, 4.5% in 2018, and 1.6% in 2019. What average return did you earn during the 2016-2019 period?
d4) Assume that the MLIK100 Index at close of trading yesterday was 4,000 and the daily volatility of the index was estimated as 0.8% per day at that time. The parameters in a GJR GARCH model are ω = 0.000005, α = 0.08, = 0.04 and β = 0.92. Where is the asymmetry parameter. If the MLIK100 moves by 50 points by close of trading today, what will the new volatility estimate be, per day, if the move is an increase or a decrease?
The following return series comes from Global Financial Data. Year Large Stocks LT Gov Bonds US T-bills CPI (Rf asset) (inflation) 2017 21.83% 6.24% 0.80% 2.07% 2018 -5.28% -1.25% 1.81% 2.10% 2019 25.45% 3.35% 2.15% 1.10% 2020 18.16% 10.25% 4.50% 1.88% 2021 28.70% -1.54% 0.40% 7.00% 2022 -19.78% -8.55% 2.20% 6.50% Calculate the average real return earned on US T-bills. (Enter percentages as decimals and round to 4 decimals)

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65. At the beginning of the slide, you were asked to derive the annualize rate of return for the U.S. stock market. In 2016 the value was 23.6 trillion and in 2018 it was 30.1 trillion. So what is the annualized RR? Select one: O a. 6.50% O b. 27.54% O c. 30.10% O d. 13.77%