Question 10 1. Suppose the real rate is 4.46% and the nominal rate is 11.39%. Solve for the inflation rate.

| November 9, 2018

Question 10

Suppose the real rate is 4.46% and the nominal rate is
11.39%. Solve for the inflation rate.

Note: Enter your
answer in percentages rounded off to two decimal points. Do not enter % in the
answer box. For example, if your answer is 0.12345 then enter as 12.35 in
the answer box.
Question 11
1. You have observed the following returns on ABC’s stocks over the
last five years:
4%, 8.9%, 6.3%, 11.8%, 5.8%
What is the arithmetic
average returns on the stock over this five-year period.
Note: Enter your answer in percentages rounded
off to two decimal points. Do not enter % in the answer box. For example,
if your answer is 0.12345 then enter as 12.35 in the answer box.
Question 12
1. Suppose the nominal rate is 9.34% and the inflation rate is 5.02%.
Solve for the real rate.
Note: Enter your answer in percentages
rounded off to two decimal points. Do not enter % in the answer box. For
example, if your answer is 0.12345 then enter as 12.35 in the answer box.
Question 13
1. You have observed the following returns on ABC’s stocks over the
last five years:
2.9%, 8.5%, 4.3%, 13.7%, 7.5%
What is the geometric
average returns on the stock over this five-year period.
Note: Enter your answer in percentages rounded
off to two decimal points. Do not enter % in the answer box. For example,
if your answer is 0.12345 then enter as 12.35 in the answer box.
Question 14
1. Suppose the returns for Stock A for last six years was 4%, 7%,
8%, -2%, 9%, and 7%.
Compute the standard deviation of the returns.
Note: Enter your answer in percentages
rounded off to two decimal points. Do not enter % in the answer box. For
example, if your answer is 0.12345 then enter as 12.35 in the answer box.
Question 15
1. Suppose a stock had an initial price of $99.37 per share, paid a
dividend of $5.8 per share during the year, and had an ending share price of
$89.27. What are the percentage returns if you own 25 shares?
Note: Enter your answer in percentages
rounded off to two decimal points. Do not enter % in the answer box. For
example, if your answer is 0.12345 then enter as 12.35 in the answer box.
Question 16
1. A portfolio is invested 39.5% in Stock A, 14.9% in Stock B, and the
remainder in Stock C. The expected returns are 16.1%, 24.8%, and 22.6%
respectively. What is the portfolio’s expected returns?
Note: Enter your answer in percentages rounded
off to two decimal points. Do not enter % in the answer box. For example,
if your answer is 12.345% then enter as 12.35 in the answer box.
Question 17
1. Suppose a stock had an initial price of $91.8 per share, paid a
dividend of $9 per share during the year, and had an ending share price of
$83.43. What are the dollar returns?
Note: Enter your answer rounded off to two
decimal points. Do not enter $ or comma in the answer box. For example, if
your answer is $12.345 then enter as 12.35 in the answer box.
Question 18
1. You have observed the following returns on ABC’s stocks over the
last five years:
3%, 9%, -7.2%, 11.4%, -7.2%
What is the arithmetic
average returns on the stock over this five-year period.
Note:
Enter your answer in percentages rounded off to two decimal points. Do not
enter % in the answer box. For example, if your answer is 0.12345 then
enter as 12.35 in the answer box.
Question 19
1. Suppose the real rate is 4.34% and the inflation rate is 5.31%.
Solve for the nominal rate.
Note:
Enter your answer in percentages rounded off to two decimal points. Do not
enter % in the answer box. For example, if your answer is 0.12345 then
enter as 12.35 in the answer box.
Question 20
1. Suppose a stock had an initial price of $70.2 per share, paid a
dividend of $7.6 per share during the year, and had an ending share price of
$109.5. What are the percentage returns?
Note:
Enter your answer in percentages rounded off to two decimal points. Do not
enter % in the answer box. For example, if your answer is 0.12345 then
enter as 12.35 in the answer box.
Question 21
1. Calculate the expected returns of your portfolio

Stock

Invest

Exp Ret

A

$332

6.4%

B

$913

19.8%

C

$1,612

21.6%

Note:
Enter your answer in percentages rounded off to two decimal points. Do not
enter % in the answer box. For example, if your answer is 12.345% then
enter as 12.35 in the answer box.
Question 23
1. Based on the following information, calculate the expected returns:

Prob

Return

Recession

30%

1.2%

Boom

70%

2.3%

Note:
Enter your answer in percentages rounded off to two decimal points. Do not
enter % in the answer box. For example, if your answer is 12.345% then
enter as 12.35 in the answer box.
Question 24
1. You have observed the following returns on ABC’s stocks over the
last five years:
4.4%, 9%, -3.5%, 10.1%, -5.8%
What is the geometric
average returns on the stock over this five-year period.
Note:
Enter your answer in percentages rounded off to two decimal points. Do not
enter % in the answer box. For example, if your answer is 0.12345 then
enter as 12.35 in the answer box.
Question 27
1. Calculate the expected returns of your portfolio

Stock

Invest

Exp Ret

A

$203

3.5%

B

$670

18.2%

C

$464

23.5%

Note:
Enter your answer in percentages rounded off to two decimal points. Do not
enter % in the answer box. For example, if your answer is 12.345% then
enter as 12.35 in the answer box.
Question 28
1. Suppose a stock had an initial price of $90.02 per share, paid a
dividend of $8.5 per share during the year, and had an ending share price of
$107.66. What are the percentage returns?
Note:
Enter your answer in percentages rounded off to two decimal points. Do not
enter % in the answer box. For example, if your answer is 0.12345 then
enter as 12.35 in the answer box.

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