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 agoRelated 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...
TRUE OR FALSE FOR REST 1. Required and expected returns are used to make investment decisions,...
TRUE OR FALSE FOR REST
1. Required and expected returns are used to make investment
decisions, while realized returns are used to evaluate investment
performance.
2. One of the most fundamental investment decision rules is to
make an investment (or buy it) if its required return is greater
than its expected return.
3. Conceptually, required returns are linked to values for
assets, while expected returns are linked to asset prices.
4. One of the primary differences between asset prices and...
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...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Suppose Rialto is the only movie cinema in a small college town, so it is essentially...
- With VMI, members of the supply chain share planning, demand, forecasting, and inventory information.
- Large lots are desirable in supply chain coordination despite increasing holding costs.
- ***Convert the C++ to Python*** #include <iostream> using std::cout; using std::cin; using std::endl; int charClass; char...
- Make-or-Buy Decision Fremont Computer Company has been purchasing carrying cases for its portable computers at a...
- The following costs were incurred for the single product produced during the first year of operations...
- Non-constant growth model: Do=$2.00 required return on equity= 5% g= 9% n=1,2 g=7% n=3,4 g=3% n=5...
ADVERTISEMENT