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08problem 3/22/2010 7:10 12/14/2005 Chapter 8. Solution to End-of-Chapter Comprehensive/Spreadsheet Problem Problem 8-22 Bartman Industries' and Reynolds Inc.'s stock prices and dividends, along with the Winslow 5000 Index, are shown below for the period 2000-2005. The Winslow 5000 data are adjusted to include dividends. a. Use the data to calculate annual rates of return for Bartman, Reynolds, and the Winslow 5000 Index, and then calculate each entity's average return over the five-year period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the rate of return for 2000 because you do not have 1999 data.) Data as given in the problem are shown below: Bartman Industries Reynolds Incorporated Winslow 5000 Year Stock Price Dividend Stock Price Dividend Includes Divs. 2005 $17.250 $1.150 $48.750 $3.000 11,663.98 2004 14.750 1.060 52.300 2.900 8,785.70 2003 16.500 1.000 48.750 2.750 8,679.98 2002 10.750 0.950 57.250 2.500 6,434.03 2001 11.375 0.900 60.000 2.250 5,602.28 2000 7.625 0.850 55.750 2.000 4,705.97 We now calculate the rates of return for the two companies and the index for 2001-2005: Bartman Reynolds Index 2005 24.7% -1.1% 32.8% 2004 -4.2% 13.2% 1.2% 2003 62.8% -10.0% 34.9% 2002 2.9% -0.4% 14.8% 2001 61.0% 11.7% 19.0% Avg Returns 29.4% 2.7% 20.6% Note: To get the average, you could get the column sum and divide by 5, but you could also use the function wizard, fx. Click fx, then statistical, then Average, and then use the mouse to select the proper range. Do this for Bartman and then copy this cell to put the formula in the other 2 cells. b. Calculate the standard deviations of the returns for Bartman, Reynolds, and the Wiinslow 5000. (Hint: Use the sample We will use the function wizard to calculate the standard deviations.
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EFM-08problem - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17...

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