Reference no: EM133116306

1. Calculate the total returns (TR) and the return relatives (RR) in term of Euro for the following assets:

i. A preferred stock bought for €70 per share, held one year during which €5 per dividend are collected and sold for €62.

ii. A 12 percent bond bought for €830, held two years during which interest is collected, and sold for €920 (assume no reinvestment).

iii. Calculate the international returns (in term of Dollar) for question (i) and (ii) if Euro appreciate from $1.25/€ to 1.35/€.

2. Bond A'a return from 2001 - 2004: -11.85%, -22.10%, 28.37%, and 10.75% respectively.

i. Calculate the arithmetic and geometric mean rate of return of bond A

ii. If you had invested $100,000 in Bond A since beginning of year 2001, determine the value of this bond at the end of 2004.

iii. Calculate the standard deviation of Bond A