Reference no: EM132951397

1) One year ago, you bought a stock for $37.13 a share. You received a dividend of $1.88 per share last month and sold the stock today for $42.09 a share.

What is the capital gains yield on this investment? _____

What is the total return on this investment? _______

2) Sarah earned an 11.1 percent nominal rate of return on her investments for the past year. During that time, the risk-free rate was 2.8 percent and the inflation rate was 1.0 percent.

What was her real rate of return? _______%

What was Sarah's risk premium?_______%

3) Over the past six years, a stock had annual returns of 29 percent, -18 percent, 38 percent, 36 percent, -1 percent, and -11 percent, respectively. Identify the following statistics:

Average return: _____%
Variance: ______ (list with four decimal places)
Standard Deviation: ______%

4) A bond has an average return of 7.1 percent and a standard deviation of 6.2 percent. What range of returns would you expect to see 68 percent of the time on this security?

Choose the right answer below:
a) -5.3 percent to 25.7 percent
b) 0.9 percent to 13.3 percent
c) -11.5 percent to 25.7 percent
d) -5.3 percent to 19.5 percent
e) -11.5 percent to 13.3 percent

A bond has an average return of 7.1 percent and a standard deviation of 6.2 percent. What range of returns would you expect to see 95 percent of the time on this security?
a) 0.9 percent to 13.3
b) 0.9 percent to 19.5 percent
c) -5.3 percent to 19.5 percent
d)-11.5 percent to 25.7 percent
e) 0.9 percent to 25.7 percent

5) Your portfolio has provided you with returns of 7.5 percent, 16.4 percent, -5.9 percent, and 15.3 percent over the past four years, respectively.

What is the geometric average return for this period? _____ %

What is the arithmetic average return for this period?______ %

Your brother's portfolio has provided with returns of 7.5 percent, 10.6 percent, 9.3 percent, and 10.6 percent over the past four years, respectively.

What is the geometric average return for this period? _____ %

What is the arithmetic average return for this period? _____ %