Scott purchased 200 shares of frozen foods stock for

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Statistics for Management and Economics + XLSTAT Bind-in
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Chapter 4 / Exercise 4.8
Statistics for Management and Economics + XLSTAT Bind-in
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59.Scott purchased 200 shares of Frozen Foods stock for $48 a share. Four months later, he received a dividend of $0.22 a share and also sold the shares for $42 each. What was his annualized rate of return on this investment? A. -44.69 percentB. -40.14 percentC. -33.00 percentD.-31.95 percentE. -28.07 percentHPR = ($42 - $48 + $0.22)/$48 = -.120417Annualized return = (1 - .120417)12/4- 1 = -31.95 percent
Accessibility: Keyboard NavigationBlooms: ApplyJordan - Chapter 01 #59Learning Objective: 01-01 How to calculate the return on an investment using different methods.Level of Difficulty: 2 MediumSection: 1.1Topic: Annualized Return60.A stock has an average historical risk premium of 5.6 percent. The expected risk-free rate for next year is 2.4 percent. What is the expected rate of return on this stock for next year?
Accessibility: Keyboard NavigationBlooms: ApplyJordan - Chapter 01 #60Learning Objective: 01-03 The historical risks on various important types of investments.Level of Difficulty: 1 EasySection: 1.3Topic: Expected Return
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Statistics for Management and Economics + XLSTAT Bind-in
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Chapter 4 / Exercise 4.8
Statistics for Management and Economics + XLSTAT Bind-in
Keller
Expert Verified
61.Last year, ABC stock returned 11.4 percent, the risk-free rate was 3.2 percent, and the inflation rate was 2.8 percent. What was the risk premium on ABC stock?
Accessibility: Keyboard NavigationBlooms: ApplyJordan - Chapter 01 #61Learning Objective: 01-03 The historical risks on various important types of investments.Level of Difficulty: 1 EasySection: 1.3Topic: Risk Premium62.Over the past four years, Jellystone Quarry stock produced returns of 12.5, 15.1, 8.7, and 2.6 percent, respectively. For the same time period, the risk-free rate 4.7, 5.3, 3.9, and 3.4 percent, respectively. What is the arithmetic average risk premium on this stock during these four years?
Accessibility: Keyboard NavigationBlooms: ApplyJordan - Chapter 01 #62Learning Objective: 01-03 The historical risks on various important types of investments.Level of Difficulty: 1 EasySection: 1.3Topic: Average Risk Premium63.Over the past five years, Teen Clothing stock produced returns of 18.7, 5.8, 7.9, 10.8, and 11.6 percent, respectively. For the same five years, the risk-free rate 5.2, 3.4, 2.8, 3.4, and 3.9 percent, respectively. What is the arithmetic average risk premium on Teen Clothing stock for this time period? A. 6.89 percentB. 7.01 percentC.7.22 percentD. 7.34 percentE. 7.57 percentAverage risk premium = [(.187 - .052) + (.058 - .034) + (.079 - .028) + (.108 - .034) + (.116 - .039)]/5 = 7.22 percent
Accessibility: Keyboard NavigationBlooms: ApplyJordan - Chapter 01 #63Learning Objective: 01-03 The historical risks on various important types of investments.Level of Difficulty: 1 EasySection: 1.3Topic: Average Risk Premium

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