You bought Sumsung stock for $45 on April 1. The stock paid a dividend of $2...

You bought Sumsung stock for $45 on April 1. The stock paid a dividend of $2 on July 1, and had a price of $55. It is now Oct. 1, and the stock price is $50. Treasury bills yield 1%.

1. What was the arithmetic average quarterly return?

2. What was the standard deviation of quarterly returns?

3. What's your best guess for the Sharpe ratio of Samsung stock for the next quarter?

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Note- Population Standard deviation calculated in above picture, if you need you can also calculate Sample standard deviation by using "STDEV.S" excel function.

If you need manual calculation, please do comment.

Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.

jeff jeffy answered 1 week ago

Next > < Previous

Related Solutions

You bought 1000 shares of Micro, Inc. at 45. The stock paid a $1.35 annual dividend...

You bought 1000 shares of Micro, Inc. at 45. The stock paid a $1.35 annual dividend in the year when you purchased the stock. In subsequent years, the dividend was increased 6 percent a year. The stock price stayed at 45 for the first year and then rose 13 percent a year. If you participated in the firm’s dividend reinvestment plan, calculate the value of your stock investment after 4 years. Calculate your HPR if you sold the stock at...

You bought 1000 shares of Micro, Inc. at 45. The stock paid a $1.35 annual dividend...

You bought 1000 shares of Micro, Inc. at 45. The stock paid a $1.35 annual dividend in the year when you purchased the stock. In subsequent years, the dividend was increased 6 percent a year. The stock price stayed at 45 for the first year and then rose 13 percent a year. If you participated in the firm’s dividend reinvestment plan, calculate the value of your stock investment after 3 years. Calculate your HPR if you sold the stock at...

You bought 1000 shares of Micro, Inc. at 45. The stock paid a $1.35 annual dividend in the year when you purchased the stock.

The company bought debentures with a face value of $1 45 ,000 and paid $1 2...

The company bought debentures with a face value of $1 45 ,000 and paid $1 2 5 ,000 to the issuer plus a purchase commission of $2 ,000 . The debentures have a life of 4 years and will pay a coupon of 6.53 % per year at the end of each year. These instruments have been classified as subsequently measured at fair value th rough profit and loss . By the end of the 4 th year, Australian interest...

A stock just paid a dividend of $2. The stock is expected to increase its dividend...

A stock just paid a dividend of $2. The stock is expected to increase its dividend payment by 50% per year for the next 3 years. After that, dividends will grow at a rate of 5% forever. If the required rate of return is 7%, what is the price of the stock today?

given: (1)The current price of a stock is 30. (2)A dividend of 1 will be paid...

given: (1)The current price of a stock is 30. (2)A dividend of 1 will be paid 6 months from now. (3)The one-year forward price is 30.9. Calculate the continuously compounded risk-free annual rate of interest.

2) You are thinking about investing in stock in a company which paid a dividend of...

2) You are thinking about investing in stock in a company which paid a dividend of $10 this year and whose dividends you expect to grow at 4 percent a year. The required return is 8 percent. If the price of the stock in the market is $200 a share, should you buy it? please help me !

A stock just paid a dividend of $1, and is estimated to have a dividend growth...

A stock just paid a dividend of $1, and is estimated to have a dividend growth rate of 25% and 10% in the next two years. The stock is estimated to settle down to a 4% constant dividend growth thereafter. The required return of investors is 12%. (Round your answer to two digits after the decimal point.) show your work What is the dividend of year 1? What is the dividend of year 2? What is the dividend of year...

1. A) A stock just paid a dividend of $1.16. The dividend is expected to grow...

1. A) A stock just paid a dividend of $1.16. The dividend is expected to grow at 24.14% for five years and then grow at 4.69% thereafter. The required return on the stock is 12.47%. What is the value of the stock? B) A stock just paid a dividend of $2.34. The dividend is expected to grow at 28.45% for two years and then grow at 3.72% thereafter. The required return on the stock is 10.49%. What is the value...

You purchased a stock at a price of $48.74. The stock paid a dividend of $1.91...

You purchased a stock at a price of $48.74. The stock paid a dividend of $1.91 per share and the stock price at the end of the year is $54.79. What is the capital gains yield?

Subjects