Calculating Returns Suppose a stock had an initial price of $92 per share, paid a dividend of $1.45 per share during the year, and had an ending share price of $104. Compute the percentage total return.
Calculating Yields In Problem 1, what was the dividend yield? The capital gains yield?
Calculating Returns Rework Problems 1 and 2 assuming the ending share price is $81.
Calculating Returns Suppose you bought an 8 percent coupon bond one year ago for $1,090. The bond sells for $1,056 today.
Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?
What was your total nominal rate of return on this investment over the past year?
If the inflation rate last year was 3 percent, what was your total real rate of return on this investment?
Nominal versus Real Returns What was the arithmetic average annual return on large-company stocks from 1926 through 2008
In nominal terms?
In real terms?
Bond Returns What is the historical real return on long-term government bonds? On long-term corporate bonds?
p. 324Calculating Returns and Variability Using the following returns, calculate the average returns, the variances, and the standard deviations for X and Y:
(K)
Risk Premiums Refer to Table 10.1 in the text and look at the period from 1973 through 1978.
Calculate the arithmetic average returns for large-company stocks and T-bills over this period.
Calculate the standard deviation of the returns for large-company stocks and T-bills over this period.
Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the arithmetic average risk premium over this period? What was the standard deviation of the risk premium over this period?
Calculating Returns and Variability You've observed the following returns on Mary Ann Data Corporation's stock over the past five years: 34 percent, 16 percent, 19 percent, −21 percent, and 8 percent.
What was the arithmetic average return on Mary Ann's stock over this five-year period?
What was the variance of Mary Ann's returns over this period? The standard deviation?
Calculating Real Returns and Risk Premiums In Problem 9, suppose the average inflation rate over this period was 4.2 percent, and the average T-bill rate over the period was 5.1 percent.
What was the average real return on Mary Ann's stock?
What was the average nominal risk premium on Mary Ann's stock?
Calculating Real Rates Given the information in Problem 10, what was the average real risk-free rate over this time period? What was the average real risk premium?
Holding Period Return A stock has had returns of 18.43 percent, 16.82 percent, 6.83 percent, 32.19 percent, and −19.87 percent over the past five years, respectively. What was the holding period return for the stock?
Calculating Returns You purchased a zero coupon bond one year ago for $77.81. The market interest rate is now 9 percent. If the bond had 30 years to maturity when you originally purchased it, what was your total return for the past year?
Calculating Returns You bought a share of 5 percent preferred stock for $92.85 last year. The market price for your stock is now $94.63. What was your total return for last year?
Calculating Returns You bought a stock three months ago for $75.15 per share. The stock paid no dividends. The current share price is $82.01. What is the APR of your investment? The EAR?
p. 325Calculating Real Returns Refer to Table 10.1. What was the average real return for Treasury bills from 1926 through 1932?
Return Distributions Refer back to Table 10.2. What range of returns would you expect to see 68 percent of the time for long-term corporate bonds? What about 95 percent of the time?
Return Distributions Refer back to Table 10.2. What range of returns would you expect to see 68 percent of the time for large-company stocks? What about 95 percent of the time?