The following data is provided for a market 500 Index: &nb

The following data is provided for a market 500 Index:

                        Year     Total return     Year     Total return
                        2010    9.0%                2020    2.0%
                        2011    11.0%             2021    3.0%
                        2012    -3.0%               2022    3.0%
                        2013    1.0%                2023    -1.0%
                        2014    5.0%                2024    5.0%
                        2015    -12.0%             2025    4.0%
                        2016    3.0%                2026    -3.0%
                        2017    4.9%                2027    3.5%
                        2018    -7.0%               2028    7.0%
                        2019    0.1%                2029    5.8%

Calculate the 20-year arithmetic average annual rate of return on the market Index.

A) 2.07%

B) 0.10%

C) 2.59%

D) 5.62%

Expert Solution

WE HAVE TO ADD ALL 20 YEARS RETURN AND THEN DIVIDE BY 20 TO GET AVERAGE ANNUAL RATE OF RETURN

AS SHOWN IN IMAGE, TOTAL RETURN OF ALL 20 YEARS = 41.3%

SO AVERAGE RETURN = 41.3%/20 = 2.07%

ANSWER : A) 2.07%

jeff jeffy answered 6 months ago

The following data is provided for the S&P 500 Index: Year Total Return Year Total Return...

The following data is provided for the S&P 500 Index: Year Total Return Year Total Return 1988 16.81% 1998 28.58% 1989 31.49% 1999 21.04% 1990 -3.17% 2000 -9.11% 1991 30.55% 2001 -11.88% 1992 7.67% 2002 -22.10% 1993 9.99% 2003 28.70% 1994 1.31% 2004 10.87% 1995 37.43% 2005 4.91% 1996 23.07% 2006 15.80% 1997 33.36% 2007 5.49% Refer to the information above. Calculate the 20-year arithmetic average annual rate of return on the S&P 500 Index. Question 22 options: 13.04% 11.81%...

Which of the following are examples of market value indexes? I. S&P 500 stock index II....

Which of the following are examples of market value indexes? I. S&P 500 stock index II. Dow Jones Industrial Index III. NASDAQ index IV. Wilshire 5000 Index A. I B. II C. I and III D. I, III, and IV

ABC Company has provided the following information from their records: &nb

ABC Company has provided the following information from their records: Purchases Sales Units Unit Cost Units Selling Price/Unit Mar 1 Beginning inventory 100 $50 3 Purchase 60 $60 4 Sales 70 $100 10 Purchase 200 $70 16 Sales 80 $110 19 Sales 80 $110 25 Sales 50 $110 30 Purchase 40 $75 Using the inventory and sales data above, to complete the below inventory schedule under FIFO method and prepare the journal entries...

Given the following price data for EA and the Market Index (DIA) from 2000 to 2015,...

Given the following price data for EA and the Market Index (DIA) from 2000 to 2015, find the returns for each price series, then calculate the beta for EA's stock. (Round to 3 decimals) Year Ea DIA 2000 21.3125 74.67136 2001 29.975 70.95762 2002 24.885 60.53014 2003 47.68 77.4199 2004 61.68 81.3084 2005 52.31 82.6164 2006 50.36 98.24182 2007 58.41 106.8822 2008 16.04 72.5348 2009 17.75 89.03117 2010 16.38 101.5058 2011 20.6 109.6855 2012 14.52 120.583 2013 22.94 156.3253 2014...

Use the following data for questions 19 and 20 Month Nike S&P 500 Index Prices Prices...

Use the following data for questions 19 and 20 Month Nike S&P 500 Index Prices Prices Jan-13 52.90 2,279 Feb-13 57.16 2,364 Mar-13 55.73 2,363 Apr-13 55.41 2,384 May-13 52.99 2,412 Jun-13 59.00 2,423 Jul-13 59.05 2,470 Aug-13 52.81 2,472 Sep-13 51.85 2,519 Oct-13 54.99 2,575 Nov-13 60.42 2,648 Dec-13 62.55 2,674 Jan-14 68.22 2,824 What is the standard deviation of monthly percentage returns for the S&P 500? a. 1.64% b. 6.7% c. 1.81% d. 2.53% For the prices presented...

You have been provided the following data on the securities of three firms and the market:...

You have been provided the following data on the securities of three firms and the market: Security E[Rj] sj rjM bj Firm A 0.13 .12 ? .90 Firm B 0.16 ? 0.40 1.10 Firm C 0.25 0.24 0.75 ? Market 0.15 0.10 1 1 Risk-free 0.05 0 0 0 Assume the CAPM holds true. Fill in the missing values in the table. 0.9 = (rjM)(0.12) / 0.10 ri,m= .75 bj = (rjM)(sj) / sm = .4 (sj) / .10...

Question 1 Will the stock market, as represented by the S&P 500 index, enjoy a positive...

Question 1 Will the stock market, as represented by the S&P 500 index, enjoy a positive return? Question 1 options: Yes No Question 2 Will interest rates, as measured by the 10-year Treasury bond yield, increase or decrease? Question 2 options: Increase Decrease Question 3 Please order the following stocks by your expectation of their total return (from highest to lowest). Question 3 options: CSCO (Cisco) AAL (American Airlines) WMT (Walmert) GM (General Motors) ZM (Zoom) Question 4 Euro...

Will the stock market get positive returns? (as represented by the S&P 500 index) Yes or...

Will the stock market get positive returns? (as represented by the S&P 500 index) Yes or No

The S&P 500, or simply the S&P, is a stock market index that measures the stock...

The S&P 500, or simply the S&P, is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States. define an adequate investment strategy, and select the assets they would invest to start with. -the potential customer profile specifications (SAP 500), -the portfolio objectives -the investment policies (strategic allocation) -The choice and justification of a benchmark -a trial portfolio based on the team investment guidelines -a brief evaluation on each...

The Excel file Stock Data contains monthly data for several stocks and the S&P 500 Index...

The Excel file Stock Data contains monthly data for several stocks and the S&P 500 Index (i.e., the market). Assume the risk free rate of return is 2.5%. Compute the cost of equity (required rate of return) for Cin using the classic CAPM. Compute the Weighted Average Cost of Capital (WACC) for Cin using the classic CAPM if the corporate tax rate is 20%, the cost of debt is 15% and the capital structure is: 75% equity and 25% debt....

Question