In: Finance

Common text for questions 3 and 4:

An investor buys three shares of XYZ at the beginning of 2002 for
$100 apiece. After one year, the share price has increased to $110
and he receives a dividend per share of $4. Right after receiving
the dividend, he buys two additional shares at $110. After another
year, the share price has dropped to $90, but the investor still
receives a dividend per share of $4. Right after receiving the
dividend, he sells one share at $90. After another year, the share
price has gone up to $95, the investor receives a dividend per
share of $4 and sells all shares at $95 immediately after receiving
dividends.

3. What are the arithmetic and geometric average time-weighted rates of return and what is the dollar-weighted rate of return of the investor in the above example (for the dollar-weighted return assume that (i) the cash flows from dividends received at the end of a given year are based on the number of shares held at the beginning of that year, and (ii) cash flows from dividends occur on the same day as the cash flows from buying and selling shares)?

4. Why is the dollar-weighted average rate of return in the above example lower than the geometric average rate of return?

An investor buys three shares of XYZ at the beginning of 2002
for $100 apiece. After one year, the share price has increased to
$110 and he receives a dividend per share of $4. Right after
receiving the dividend, he buys two additional shares at $110.
After another year, the share price has dropped to $90, but the
investor still receives a dividend per share of $4. Right after
receiving the dividend, he sells one share at $90. After another...

Farms inc. owns 4% of common shares of XYZ. co. at the beginning
of the current year the fair value of an investment in XYZ was
$250,000. At the end of the year, the fair value had decreased to
$245,000.
What journal entry would Farms inc. record to adjust the
investment of the fair value?

an investor is evaluating the common shares od the three firms
A,B and C. Expected returns, standard deviation of returns , and
betas are :
stock expected return standard
deviation beta weight
A 10% 8% 1.4 20%
B 15% 12% 1.2 50%
C 20% 13% 1.8 30%
a) What is the expected return of the portfolio ?
b) What is Beta of the portfolio ?
c) Assume the risk free rate of interest is 6% and the...

An investor buys some shares of ABC for $20 at the beginning of
the year. During the year he receives $0.50 in dividends, and then
sells the shares for $21 at the end of the year. What is the total
return on this investment?

Part I.
Answer the following three (3) questions. Copy and paste the
questions into the Text Submission box (below), then type your
answers directly below each question.
Q1. What is feedback? How can verbal feedback affect
customer encounters?
A.
Q2. Give some examples of nonverbal feedback and explain
how they complement the verbal message and how they can affect
customer interactions.
A.
Q3. What are the four spatial distances observed in
Western cultures, and for which people or situations is...

Part I. Answer the following three (3) questions. Copy and paste
the questions into the Text Submission box (below), then type your
answers directly below each question.
Q1. What is feedback? How can verbal feedback affect customer
encounters? A.
Q2. Give some examples of nonverbal feedback and explain how
they complement the verbal message and how they can affect customer
interactions. A.
Q3. What are the four spatial distances observed in Western
cultures, and for which people or situations is...

An investor sells short 100 shares of XYZ stock at $62 and sells
1 XYZ Oct 60 put @$6. The maximum potential gain is: (Show your
work).

An investor buys a 6 months maturity strangle on XYZ
stock at $32 call and $27 put, for $2 call and $3
put.
What is the long and short strangle payoff, if the stock price
at expiration date increased to $42 per
share?
What are the long and short strangle payoffs, if the market
price at expiration date decreased to $20 per share?
What are the long and short strangle payoffs, if the market
price at expiration date remained $32...

Investor buys 200 shares of stock at $27.25 per share. Investor
sells the stock after one year. 1. What is the dollar amount of
gain and the percent of return if the stock is sold for $32.60 per
share? How much does the yield percentage increase to if the stock
received a per share dividend of $1.15 during the year? 2. What is
the dollar amount of loss and percentage of return if the stock
received a per share dividend...

An investor buys 50 shares of BOA at $22.6 per share at the
beginning of 2017, buys another 80 shares at $29.75 per share at
the beginning of 2018, sells 30 shares at $24.08 per share at the
beginning of 2019, and sells all 100 remaining shares at $35.35 per
share at the beginning of 2020. BOA pays $0.39 per share of
dividends at the end of 2017, pays $0.54 per share of dividends at
the end of 2018, and...

ADVERTISEMENT

ADVERTISEMENT

Latest Questions

- (a) Critically evaluate how conflict can be managed in an organisation, Illustrate your answer with examples...
- CASH FLOW AND CAPITAL BUDGETING Aus Car Execs (ACE) is set up as a sole trader...
- In Java in previous question #1, you created a method called isDNAvalid() in the DNA class....
- Lately, with the rapid growth of alternative energy systems, microgrid has been gaining much popularity in...
- Executive summary on Documents clearance? Executive summary on operation department? Introduction on documents clearance?
- Taco Salad Manufacturing, Inc., plans to announce that it will issue $2.27 million of perpetual debt...
- 1- Show that (n^3+3n^2+3n+1) / (n+1) is O (n2 ). Use the definition and proof of...

ADVERTISEMENT