CORPORATE FINANCE-ACCESS >CUSTOM<
11th Edition
ISBN: 9781260170016
Author: Ross
Publisher: MCG CUSTOM
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Question
Chapter 12, Problem 4CQ
a.
Summary Introduction
To determine: To respond to the statement based on the actual occurrences that affects the return of stock.
Introduction:
Systematic Risk is acknowledged as non diversifiable risks or market risk. Such category of risk is not intended to be separated by distinguishing assets. Systematic risk leads on how a particular investment in a distinguished portfolio that support financially to the total or aggregate risk of a business's financial funding. Unsystematic Risk is acknowledged as diversifiable or residual or particular risk. The proportion of a corporation’s total or aggregate risk which can be barred by holding such risks in a distinguished or as diversified asset portfolio.
b.
Summary Introduction
To determine: To respond to the statement based on the actual occurrences that affects the return of stock.
c.
Summary Introduction
To determine: To respond to the statement based on the actual occurrences that affects the return of stock.
b.
Summary Introduction
To determine: To respond to the statement based on the actual occurrences that affects the return of stock.
d.
Summary Introduction
To determine: To respond to the statement based on the actual occurrences that affects the return of stock.
e.
Summary Introduction
To determine: To respond to the statement based on the actual occurrences that affects the return of stock.
f.
Summary Introduction
To determine: To respond to the statement based on the actual occurrences that affects the return of stock.
g.
Summary Introduction
To determine: To respond to the statement based on the actual occurrences that affects the return of stock.
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Please include the excel formula
You’ve observed the following returns on Pine Computer’s stock over the past five years: 8 percent, −12 percent, 14 percent, 21 percent, and 16 percent. Suppose the average inflation rate over this period was 3.1 percent and the average T-bill rate over the period was 3.9 percent. What was the average real return on the company’s stock? What was the average nominal risk premium on the company’s stock over this period?
Input area:
Year
Returns
1
8%
2
-12%
3
14%
4
21%
5
16%
Average inflation
3.10%
Average T-bill rate
3.90%
(Use cells A6 to B13 from the given information to complete this question. You must use the built-in Excel function to answer this question. Make sure to use the “sample” Excel formula.)…
The returns on the common stock of New Image Products are quite cyclical. In a boom economy, the stock is expected to return 23 percent in comparison to 14 percent in a normal economy and a negative 18 percent in a recessionary period. The probability of a recession is 18 percent while the probability of a boom is 22 percent. What is the standard deviation of the returns on this stock?
P/s : Please show the step by step not using calculation via excel sheet. Thank you.
Calculating Real Returns and Risk Premiums
You’ve observed the following returns on Bennington Corporation’s stock over the past five years: 13 percent, −8 percent, 16 percent, 16 percent, and 10 percent. Suppose the average inflation rate over this period was 1.5 percent and the average T-bill rate over the period was 5 percent.
a.
What was the average real return on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b.
What was the average nominal risk premium on the company's stock?
Chapter 12 Solutions
CORPORATE FINANCE-ACCESS >CUSTOM<
Ch. 12 - Prob. 1CQCh. 12 - Prob. 2CQCh. 12 - Prob. 3CQCh. 12 - Prob. 4CQCh. 12 - Market Model versus APT What are the differences...Ch. 12 - APT In contrast to the CAPM, the APT does not...Ch. 12 - CAPM versus APT What is the relationship between...Ch. 12 - Prob. 8CQCh. 12 - Data Mining What is data mining? Why might it...Ch. 12 - Prob. 10CQ
Ch. 12 - Prob. 1QPCh. 12 - Factor Models Suppose a three-factor model is...Ch. 12 - Prob. 3QPCh. 12 - Multifactor Models Suppose stock returns can be...Ch. 12 - Prob. 5QPCh. 12 - Market Model The following three stocks are...Ch. 12 - Prob. 7QPCh. 12 - Prob. 8QPCh. 12 - APT Assume that the following market model...Ch. 12 - Prob. 10QP
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