Differentiate between the terms expected rate of return, required rate of return, and historical rate of return as they are applied to common stocks

Q: The wider the dispersion of returns on a stock, the:

A: Investors evaluate the portfolio or security on the basis of risk profile. The risk profile can be…

Q: what is the return of stock a what is the return of stockb what is the standard deviation on stock…

A: Given: tate Probability(P) Return A Return B Poor 40% -0.08 -0.15 Normal 35% 0.19 0.14 Good…

Q: Market's required yield on preferred stock is actually the promised rate of return. Explain this…

A: A profit on an investment is referred to as a return in finance. It includes interest payments,…

Q: Define risk premium for individual Stock i, RP

A: Risk premium for an individual stock “i”: A risk premium for an individual stock ‘i’ is the return…

Q: Compare and contrast dollar returns and rates of return.

A: The returns from any investment can be calculated in terms of value (amount terms) or percentages.

Q: Explain carefully how and why a decline in the required rate of return affects stock values and…

A: The required rate of return is defined as the minimum percentage of return on investment in which an…

Q: What are the two components of most stocks’ expected total return?

A: Expected total return refers to the full return of an investment over a certain period of time.

Q: How do you calculate price earnings ratio, given the stocks historical prices?

A: Price earnings ratio is ratio of price per share and earning per share. PE ratio=Price per…

Q: How can you chart and predict falling or rising wedges for stocks?

A: Short-term, medium-term, and long-term trends: Stock Prices move either upwards, downwards, or…

Q: Calculate the yield of the following stock.

A:

Q: Explain 'Can efficient market hypothesis and behavioural finance co-exist to explain stock return…

A: Behavioral finance, a branch of behavioral economics, presupposes that psychological impacts and…

Q: Define risk premium for individual Stock i

A: The risk premium for an individual stock i It is the expected ROR on investment that exceeds…

Q: Is it possible to construct a portfolio of real-world stocks that has a required return equalto the…

A: The theoretical rate of return for an investment with no risk is known as the risk-free rate of…

Q: What is the relationship between the price, coupon rate  and market yield?

A: The coupon rate is the bond's interest rate. The coupon rate is not the same as the market interest…

Q: Calculate the expected return for Stock A.

A: Expected Return: It represents the profit or loss expected by an investor on an investment. It is…

Q: What are the benefits of stocks

A: A stock means the small units of the company which is issued by the company to investors. A company…

Q: . The difference between the expected (c equired) return for the market portfolio ar he risk-free…

A: This pertains to the CAPM (capital asset pricing model). The difference between expected return on a…

Q: Explain how to find the value of a nonconstant growth stock

A: Introduction: Non-constant models of growth presume that the valuation can fluctuate over time. This…

Q: What is definitions of this?   Systematic risk  Risk free rate of return  Market rate of…

A: Capital asset pricing model (CAPM) can be used to compute the return expected by the investors by…

Q: Why are rates of return superior to dollar returns when comparingdifferent potential investments?

A: A rate of return (ROR) refers to the net income or loss of an investment over a given timeframe as a…

Q: With all investments, there are an expected percentage return and certain types of return that can…

A: A bond is a fixed-income security that symbolizes the debt owed to a lender by a borrower (typically…

Q: The sum of the expected dividend and the expected capital gains yield is called a. Required rate of…

A: Investors invest in any security or investment with a motive to generate returns and increase…

Q: The return of stock B is __% The volatility of stock A is __% The volatility of stock B is __%

A: Thank you for posting questions. Since you have posted multiple questions, as per the guideline I am…

Q: what are the main features of preffered stocks

A: Preferred stocks : Preferred stocks are the securities, whose holders have a stake in the company.…

Q: Explain how to find the value of a stock given itslast dividend, its expected growth rate, and…

A: A model that helps to evaluate the value of the stock with the assumption that the dividend will…

Q: What is the expected return on the firms stock

A: Here, Proportion of Debt is 75% Proportion of Equity will be (1-75%) = 25% Cost of Debt is 5% Risk…

Q: Consider the role of financial statement analysis in an efficient capital market, and review…

A: Security prices represent the aggregate information known by the capital markets about a firm.…

Q: In evaluating portfolio return we use the market values at the beginning of the period to compute…

A: A pool of different type of investments is called as portfolio. Return from this total pool of…

Q: Are stock prices affected more by long-term or short-termperformance? Explain.

A: Answer: The stock prices are influenced by results in both the long and the short term. The…

Q: Illustrate the market interest rate to find the net present worth?

A: Investors frequently find the present worth of the fund flows for the reason that savers receive the…

Q: What is the expected return for stock A?

A: Expected Return: It is computed by the sum of individual returns proportionately weighted by each…

Q: Discuss the impact of investor sentiment on stock returns conditional on economic conditions

A: Investor's sentiment means the attitude of the investors toward different securities or even the…

Q: Calculate the expected return for each stock assuming the Capital Asset Pricing Model (CAPM) is…

A: Risk free rate = 5% Expected return on market = 11% Beta of stock A = 0.7 Beta of stock B = 1.4

Q: Define stock repurchase

A: STOCK REPURCHASE- ''Stock repurchase or repurchase could be a thanks to come money to investors,…

Q: According to Technical Analysis, a stock velocity statistics most closely resembles which of the…

A: "Hi, Thanks for the Question. Since you asked multiple question, we will answer first question for…

Q: (d) Explain the difference between cumulative or noncumulative stocks.

A: preferred stock These are the shareholders who are given preference in respect of dividend as…

Q: The constant growth DCF model used to evaluate the prices of common stocks isconceptually similar to…

A: Answer -true.

Q: a) Differentiate between value and growth stocks? Briefly summarise the evidence relating to the…

A: Since you have asked multiple questions, we will solve the first question for you. Please ask…

Q: which is the return on the risk capital, includes stock price appreciation plus dividends received…

A: which isthe return on the risk capital, includes stock price appreciation plusdividends received…

Q: Calculated the expected return of each stock

A: Expected Return on Stock = Sum of (Probability x Return) in each case

Q: Determine whether stock prices are affected more by long-term or short-term performance. Provide an…

A: Stock prices are affected by long term performance and not short term. In practice though short term…

Q: Discuss the application of the Capital Asset Pricing Model in stock selection.

A: CAPM is an abbreviation used for Capital asset Pricing model which helps the investors in evaluating…

Q: Define and briefly discuss the investment merits of each of the following. Blue chips Income stocks…

A: Investment is referred to as an asset that are acquired or invested for building the wealth and also…