""""Correct Answer =4G29% 6:17 pmelearn.fnu.ac.fj/mc8 !The primary securities markets areO a. the markets where financialassets such as stocks andbonds are initially issuedO b. the three most importantfinancial markets in anyeconomyO c. the markets for stocks andbonds onlyO d. the markets for previouslyissued securities such asthe SPSE

The primary security market refers to the market which creates new funds in the market for selling…

Answered: The primary securities markets are O a.…

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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A4 5c Consider the following information on three stocks in four possible future states of the economy: State of economy Probability of state of economy Stock A Stock B Stock C Boom 0.3 0.35 0.45 0.38 Good 0.3 0.15 0.20 0.12 Poor 0.3 0.05 –0.10 –0.05 Bust 0.1 0.00 –0.30 –0.10 stock A: State of economy Probability Rate of return Average (a) (b) (c) (d = b × c)(d = b × c) Boom 0.3 0.35 0.105 Good 0.3 0.15 0.045 Poor 0.3 0.05 0.015 Bust 0.1 0 0 Expected rate of return 0.165 stock B: State of economy Probability Rate of return Average (a) (b) (c) (d = b × c)(d = b × c) Boom 0.3 0.45 0.135 Good 0.3 0.2 0.06 Poor 0.3 -0.1 -0.03 Bust 0.1 -0.3 -0.03 Expected rate of return 0.135 Stock C: State of economy Probability Rate of return Average (a) (b) (c) (d = b × c)(d = b…
The market risk premium is 5.41% and the yield on a Treasury bond is 1.02%. What is the fair return on this stock? this is part of the questionAmazon.com, Inc. (AMZN) NasdaqGS - NasdaqGS Real Time Price. Currency in USD 3,099.40 - 17.62 (-0.57%) At close: November 20 4:00PM EST Summary Company Outlook Chart Conversations Sta Previous Close 3,117.02 Market Cap 1.555T Open 3,117.02 Beta (5Y Monthly) 1.30 Bid 3,102.80 x 800 PE Ratio (TTM) 90.62 Ask 3,104.75 x 900 EPS (TTM) 34.20 Day's Range 3,098.05 - 3,132.89 Earnings Date Jan 28, 2021 - Feb 01, 2021 52 Week Range 1,626.03 - 3,552.25 Forward Dividend & Yield N/A (N/A) Volume 3,380,138 Ex-Dividend Date N/A Avg. Volume 5,170,951 1y Target Est 3,812.78
What is the CAPM required return for Stock Z, in decimal form? Round your answer to 4 decimal places (example: if your answer is .13579, you should enter .1358). Margin of error for correct responses: +/- .0005. expected return (implied by market price) Beta Stock Z 9.7% 1.43 MRP 6% ? T-bonds 5% ?
470 -37 Assume that the dividend payout ratio will be 55 % when the rate on long term government bonds falls to 9%. Since investors are becoming more risk averse, the equity risk premium will rise to 8% and investors will require a 7% return. The return on equity will be 13%. What is your expectation of the market P/E ration? a. 37.69 b. 24.92 c. 58.15 d. 55.02 e. 47.82
The stock of Eaton Corporation (ticker: ETN) has an E(R) = 9.3% and a reward-to-risk ratio = 6.32%. If Eaton’s beta = .94, then the current return on U.S. T-Bills is: a. 3.23% b. 1.32% c. 3.10% d. 2.94% e. 3.36%
D1 = $0.75, rs = 10.5%, g = 6.4%. Calculate the stock price. $18.39 $18.84 $18.29 $17.75
Please answer both questions What is the risk premium for the stock in the table below? The risk free rate is 1.05% and the market risk premium is 5.41%. What is the expected return based on CAPM for the stock in the table below? The risk free rate is 1.05% and the market risk premium is 5.41%. The Home Depot, Inc. (HD) NYSE - NYSE Delayed Price. Currency in USD 264.55 -0.26 (-0.10%) At close: December 11 4:00PM EST summary Company Outlook Chart Conversations Stal Previous Close 264.81 Market Cap 284.815B Open 263.36 Beta (5Y Monthly) 1.05 Bid 264.15 x 1000 PE Ratio (TTM) 22.88 Ask 264.55 x 800 EPS (TTM) 11.56 Day's Range 262.65 - 265.36 Eamings Date Feb 23, 2021 52 Week Range 140.63 - 292.95 Forward Dividend & Yield 6.00 (2.27%) Volume 3,454,512 Ex-Dividend Date Dec 02, 2020 Arg. Volume 3,631,762 ly Target Est 305.06
470 -38 Assume that the dividend payout ratio will be 55 % when the rate on long term government bonds falls to 9%. Since investors are becoming more risk averse, the equity risk premium will rise to 8% and investors will require a 7% return. The return on equity will be 13%. To what price will the market rise if the earnings expectation is $1.5? a. $138.42 b. $90.36 c. 71.74 d. 105.30 e. 85.14
Determine the market value of a Digicel Stock if D0 = 3.00, Ks = 13%, G = 6%.
D0 = $1.75, g = 3.6%, P0 = $32, find the stock return 9.27% 9.59% 9.18% 9.13%
Data: S0 = 107; X = 110; 1+r = 1.12. The two possibilities for ST are 155 and 95. (Round to 2 decimal places). a. The range of S is 60 while that of P is 15 across the two states. What is the hedge ratio of the put? Hedge ratio ? b. Form a portfolio of one share of stock and four puts. What is the (nonrandom) payoff to this portfolio? Nonrandom payoff c. What is the present value of the portfolio? Present value d. Given that the stock is currently selling at 107, calculate the put value. Put value
which one is correct please confirm? Q5: "The returns on the following 3-month instruments are quoted in the usual way (i.e. some as discount rates, some as interest yields). Which instrument offers the best rate of return?" 4.58% on a CD 4.5% on a treasury bill 4.55% on a repo 4.56% on commercial paper

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The primary securities markets are O a. the markets where financial assets such as stocks and bonds are initially issued O b. the three most important financial markets in any economy O c. the markets for stocks and bonds only O d. the markets for previously issued securities such as the SPSE