Question

In: Finance

inancial Planning Exercise 1 Ranking investments by expected returns What makes for a good investment? Use...

inancial Planning Exercise 1 Ranking investments by expected returns What makes for a good investment? Use the approximate yield formula or a financial calculator to rank the following investments according to their expected returns. Round the answers to two decimal places. Do not round intermediate calculations. Buy a stock for $45 a share, hold it for 2 years, then sell it for $80 a share (the stock pays annual dividends of $3 a share). % Buy a security for $25, hold it for 2 years, then sell it for $65 (current income on this security is zero). Do not round intermediate calculations. % Buy a 1-year, 10 percent note for $960 (assume that the note has a $1,000 par value and that it will be held to maturity). Do not round intermediate calculations. %

Solutions

Expert Solution

SEE IMAGE

Go through it, Any doubts, please feel free to ask, Give positive feedback, Thank you

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Chapter 12 Financial Planning Exercise 1 Ranking investments by expected returns What makes for a good...
Chapter 12 Financial Planning Exercise 1 Ranking investments by expected returns What makes for a good investment? Use the approximate yield formula or a financial calculator to rank the following investments according to their expected returns. Round the answers to two decimal places. Do not round intermediate calculations. Buy a stock for $45 a share, hold it for 2 years, then sell it for $80 a share (the stock pays annual dividends of $3 a share). % Buy a security...
What are the roles of actual returns and expected returns in investment planning?
What are the roles of actual returns and expected returns in investment planning?
The following are the expected returns on a portfolio of investments. What is the expected rate of return on the portfolio?
The following are the expected returns on a portfolio of investments. What is the expected rate of return on the portfolio? Investment # of shares Price per share Expected returnA. 2000 $20 10%B. 3000 $10 15%C. 1000 $15 8%
What makes for a good investment? Use the approximate yield formula or a financial calculator to...
What makes for a good investment? Use the approximate yield formula or a financial calculator to rank the following investments according to their expected returns. Round the answers to two decimal places. Do not round intermediate calculations. Buy a stock for $45 a share, hold it for 3 years, then sell it for $75 a share (the stock pays annual dividends of $3 a share). % Buy a security for $25, hold it for 2 years, then sell it for...
What makes for a good investment? Use the approximate yield formula or a financial calculator to...
What makes for a good investment? Use the approximate yield formula or a financial calculator to rank the following investments according to their expected returns. Round the answers to two decimal places. Do not round intermediate calculations. Buy a stock for $45 a share, hold it for 2 years, then sell it for $80 a share (the stock pays annual dividends of $3 a share).   % Buy a security for $25, hold it for 2 years, then sell it for...
What are the returns on the following investments? Investment Original Cost of Investment Selling Price of...
What are the returns on the following investments? Investment Original Cost of Investment Selling Price of Investment Distributions Received Dollar Return Percent Return CD $500.00 $540.00 $0.00 Stock $23.00 $34.00 $2.00 Bond $1,040.00 $980.00 $88.00 Bicycle $400.00 $220.00 $0.00 Using the following returns, calculate the average returns, the variances, and the standard deviations for X and Y. Returns Year X Y 1 16% 34% 2 18 -7 3 -9 -12 4 21 41 5 2 10
Five investment alternatives have the following returns and standard deviations of returns.        Alternatives Returns: Expected...
Five investment alternatives have the following returns and standard deviations of returns.        Alternatives Returns: Expected Value Standard Deviation A $ 1,110 $ 1,270 B 3,970 820 C 3,970 1,330 D 5,790 2,650 E 12,500 7,350      Calculate the coefficient of variation and rank the five alternatives from lowest risk to the highest risk by using the coefficient of variation. (Round your answers to 3 decimal places.)   
1. Portfolio theory defines risky investments in 2 ways expected returns and variance ( Standard deviation)...
1. Portfolio theory defines risky investments in 2 ways expected returns and variance ( Standard deviation) of expected returns. What assumptions need to be made about investors and the expected investment returns in this 2 factor approach and state if they are justified in real life. 2. What can be said about the portfolio that is represented by any point along the efficient frontier of risky investment portfolios? 3. What is meant by two fund separation? 4. The capital asset...
It is often stated for share market investing that a good company makes a good investment....
It is often stated for share market investing that a good company makes a good investment. We may define a good company as one that has experienced rapid growth (in sales, earnings or dividends) in the recent past. Required: a) Discuss some of the reasons why shares of good companies may or may not turn out to be good investments. b) As a basis for investing in shares, investors often look at (recent) past share prices and are more encouraged...
What are her expected returns and the risk from her investment in the three​ assets? How...
What are her expected returns and the risk from her investment in the three​ assets? How do they compare with investing in asset M​ alone?   Hint​: Find the standard deviations of asset M and of the portfolio equally invested in assets​ M, N, and O. b.  Could Sally reduce her total risk even more by using assets M and N​ only, assets M and O​ only, or assets N and O​ only? Use a​ 50/50 split between the asset​ pairs,...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT