1) Suppose the real rate is 2.27% and the inflation rate is 6.35%. Solve for the nominal rate. Use the Fisher Effect formula.
2) Suppose a stock had an initial price of $70.16 per share, paid a dividend of $5.1 per share during the year, and had an ending share price of $109.09. What are the percentage returns?
3) A portfolio is invested 26% in Stock A, 20.5% in Stock B, and the remainder in Stock C. The expected returns are 9.1%, 28.5%, and 18.1% respectively. What is the portfolio's expected returns?
4) Suppose the returns for Stock A for last six years was 4%, 7%, 8%, -2%, 9%, and 7%. Compute the standard deviation of the returns.
5) Based on the following information, calculate the expected returns:
Prob Return
Recession 30% 13.8%
Boom 70% 18.8%
6) Calculate the expected returns of your portfolio
Stock Invest Exp Ret
A $154 3.9%
B $700 16.6%
C $406 23.3%
7) Suppose a stock had an initial price of $76.36 per share, paid a dividend of $4.7 per share during the year, and had an ending share price of $83.53. What are the percentage returns if you own 25 shares?
8) You have observed the following returns on ABC's stocks over the last five years:
2.5%, 9.5%, -14.1%, 13.6%, -5.9%
What is the geometric average returns on the stock over this five-year period
9) Suppose a stock had an initial price of $53.72 per share, paid a dividend of $7.7 per share during the year, and had an ending share price of $88.24. What are the percentage returns?
10) Suppose a stock had an initial price of $64.29 per share, paid a dividend of $5 per share during the year, and had an ending share price of $94.19. What are the dollar returns?
11) You have observed the following returns on ABC's stocks over the last five years:
4.9%, 8%, 14.3%, 11.4%, 3%
What is the arithmetic average returns on the stock over this five-year period.
12) You have observed the following returns on ABC's stocks over the last five years:
4.5%, 8.7%, 4.3%, 12.7%, 8.4%
What is the geometric average returns on the stock over this five-year period.
13) You own a portfolio invested 25.38% in Stock A, 11.9% in Stock B, 23.5% in Stock C, and the remainder in Stock D. The beta of these four stocks are 0.93, 0.32, 0.91, and 0.92. What is the portfolio beta?
14) Suppose a stock had an initial price of $75.53 per share, paid a dividend of $8 per share during the year, and had an ending share price of $80.82. If you own 277 shares, what are the dollar returns?
15) You have observed the following returns on ABC's stocks over the last five years:
2.4%, 8.8%, -8.4%, 10%, -4.8%
What is the arithmetic average returns on the stock over this five-year period.
16) Calculate the expected returns of your portfolio
Stock Invest Exp Ret
A $484 9.1%
B $929 14.9%
C $1,781 26.9%
17) You own a portfolio invested 15.9% in Stock A, 12.14% in Stock B, 18.72% in Stock C, and the remainder in Stock D. The beta of these four stocks are 0.63, 0.33, 0.96, and 0.78. What is the portfolio beta?