Hilltop garage pays a constant annual dividend one

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Fundamentals of Financial Management
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Chapter 8 / Exercise 2
Fundamentals of Financial Management
Brigham
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55.Hilltop Garage pays a constant annual dividend. One year ago, when you purchased shares of that stock at $12 a share, the dividend yield was 2 percent. Over this past year, the inflation rate has been 2.6 percent. Today, the required return on this stock is 8 percent and you just sold all of your shares. What is your total nominal return on this investment? A. -77 percentB. -75 percentC. -73 percentD. -70 percentE. -66 percent
56.Last year, Thomas invested $38,000 in Oil Town stock, $11,000 in long-term government bonds, and $8,000 in U.S. Treasury bills. Over the course of the year, he earned returns of 12.1 percent, 6.3 percent, and 3.9 percent, respectively. What was the nominal risk premium on Oil Town's stock for the year?
57.You expect the inflation rate to be 2.9 percent and the U.S. Treasury bill yield to be 3.7 percent for the next year. The risk premium on small-company stocks is 12.6 percent. What nominal rate of return do you expect to earn on small-company stocks next year?
58.Assume large-company stocks returned 11.8 percent on average over the past 75 years. The risk premium on these stocks was 7.9 percent and the inflation rate was 3.2 percent. What was the average nominal risk-free rate of return for those 75 years?
59.Over the past five years, a stock returned 8.3 percent, -32.5 percent, -2.2 percent, 46.9 percent and 11.8 percent. What is the variance of these returns? A. 0.071188B. 0.076290C. 0.081504D. 0.082547E. 0.091306
60.Windsor stock has produced returns of 22.6 percent, 18.7 percent, 11.3 percent, -19.8 percent, and 2.4 percent over the past five years, respectively. What is the variance of these returns?
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Fundamentals of Financial Management
The document you are viewing contains questions related to this textbook.
Chapter 8 / Exercise 2
Fundamentals of Financial Management
Brigham
Expert Verified
61.Five years ago, you purchased 600 shares of stock. The annual returns have been 7.2 percent, -19.4 percent, 3.8 percent, 14.2 percent, and 27.9 percent, respectively. What is the variance of these returns?
62.Over the past six years, a stock had annual returns of 14 percent, -3 percent, 8 percent, 21 percent, -16 percent, and 4 percent, respectively. What is the standard deviation of these returns?
63.A stock has produced returns of 11 percent, 18 percent, -6 percent, -13 percent, and 21 percent for the past five years, respectively. What is the standard deviation of these returns? A. 7.75 percentB. 8.87 percentC. 9.23 percentD. 14.99 percentE. 16.64 percent

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