Chapter_5_DocCam - General Electric stock and Microsoft...

Info icon This preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 5 Example on Single-Period Rate of Return Suppose you bought a share of Home Depot at the opening price of $33.45 a share on Monday, Dec 6, 2010. You sold the stock on Friday, Dec 10, 2010 at the closing price of $34.40 a share. The company paid out $0.35 a share regular dividend on Thursday, Dec 9, 2010. (a) Ignoring transaction costs, what was the five-day HPR of this investment? (b) What was the APR and EAR of this investment? (sub question, what is n in this question?) 1
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter 5 Example on Multiple-Period Rate of Return Using the annual returns from 2004-2008 period in the table below, calculate the arithmetic and geometric average annual return of T-bills,
Image of page 2
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: General Electric stock and Microsoft stock. Year T-Bill GE MSFT 2004 1.19% 20.71% 9.16% 2005 2.98%-1.43%-0.94% 2006 4.81% 9.36% 15.82% 2007 4.40% 2.69% 20.85% 2008 1.27%-53.94%-44.38% 2 Chapter 5 Example on Risk Calculate the expected return and its standard deviation of the securities in the table below. 3 Chapter 5 End of Chapter Problem 11 4 Chapter 5 Example on Inflation and Real Rate of Return What was annual real return of T-bills in 2008 if their annual nominal return over the same period was 2.93% and the annual inflation rate was 3.16%? 5 Chapter 5 6...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern