Risk Premium If the annual return on the S&P 500 Index was 10.70 percent. The annual T-bill yield during the same period was 4.65 percent. What was the market risk premium during that year
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Risk Premium If the annual return on the S&P 500 Index was 10.70 percent. The annual T-bill yield during the same period was 4.65 percent. What was the market risk premium during that year?
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- The average annual return on the S&P SOO Index from 1988 to 1995 was 15.8 percent The average annual T-bill yield during the same period was 5.8 percent What was the market risk premium during these ten years?The average annual return on the S&P 500 Index from 1996 to 2005 was 13.27 percent. The average annual T-bill yield during the same period was 3.92 percent.What was the market risk premium during these ten years? (Round your answer to 2 decimal places.) Average Market Risk Premium: ___.__%Risk Premium If the annual return on the S&P 500 Index was 10.20 percent. The annual T-bill yield during the same period was 4.40 percent. What was the market risk premium during that year? Multiple Choice A. 14.60% B. 4.40% C. 5.80% D. 10.20%
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- 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.)The level of the Syldavia market index is 21,900 at the start of the year and 26,400 at the end. The dividend yield on the index is 4.7%. What is the return on the index over the year? If the interest rate is 6%, what is the risk premium over the year? If the inflation rate is 8%, what is the real return on the index over the year? Note: For all requirements, do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places.(CAPM and expected returns) a. Given the following holding-period returns, LOADING... Month Zemin Corp. Market 1 8 % 5 % 2 5 4 3 0 2 4 −4 −1 5 6 4 6 3 3 , compute the average returns and the standard deviations for the Zemin Corporation and for the market. b. If Zemin's beta is 1.12 and the risk-free rate is 7 percent, what would be an expected return for an investor owning Zemin? (Note: Because the preceding returns are based on monthly data, you will need to annualize the returns to make them comparable with the risk-free rate. For simplicity, you can convert from monthly to yearly returns by multiplying the average monthly returns by 12.) c. How does Zemin's historical average return compare with the return you believe you should expect based on the capital asset pricing model and the firm's systematic risk? Question content area…
- Assume the return on large-company stocks is currently 11.5 percent. The risk premium on large-company stocks is 8.6 percent and the inflation rate is 2.4 percent. What is the current risk-free rate of returnConsider historical data showing that the average annual rate of return on the S&P 500 portfolio over the past 85 years has averaged roughly 8% more than the Treasury bill return and that the S&P 500 standard deviation has been about 38% per year. Assume these values are representative of investors' expectations for future performance and that the current T-bill rate is 5%. Calculate the expected return and variance of portfolios invested in T-bills and the S&P 500 index with weights as shown below. (Enter your answers as decimals rounded to 4 places. Leave no cells blank - be certain to enter "0" wherever required.) WBills: WIndex: Expected Return: Variance: 0.0 1.0 0.1300 0.1444 Example 0.2 0.8 0.4 0.6 0.6 0.4 0.8 0.2 1.0 0.0If the annual geometric mean for the equity risk premium is 8.4 percent, what percentage of the equity risk premium is consumed by trading costs of 1.2 percent?