Question
In: Finance
A manager buys three shares of stock today, and then sells one of those shares each...
A manager buys three shares of stock today, and then sells one of those shares each year for the next 3 years. His actions and the price history of the stock are summarized below. The stock pays no dividends.
| Time | Price | Action | |||||||||
| 0 | $ | 140 | Buy 3 shares | ||||||||
| 1 | 150 | Sell 1 share | |||||||||
| 2 | 150 | Sell 1 share | |||||||||
| 3 | 150 | Sell 1 share | |||||||||
a. Calculate the time-weighted geometric average return on this portfolio. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
|
b. Calculate the time-weighted arithmetic average return on this portfolio. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
|
c. Calculate the dollar-weighted average return on this portfolio. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
|
Solutions
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jeff jeffy answered 1 year agoRelated Solutions
A manager buys three shares of stock today, and then sells one of those shares each...
A manager buys three shares of stock today, and then sells one
of those shares each year for the next 3 years. His actions and the
price history of the stock are summarized below. The stock pays no
dividends.
Time
Price
Action
0
$
125
Buy 3 shares
1
145
Sell 1 share
2
145
Sell 1 share
3
145
Sell 1 share
a. Calculate the time-weighted geometric
average return on this portfolio. (Do not
round intermediate calculations. Round your...
A manager buys three shares of stock today, and then sells one of those shares each...
A manager buys three shares of stock today, and then sells one
of those shares each year for the next 3 years. His actions and the
price history of the stock are summarized below. The stock pays no
dividends.
Time
Price
Action
0
$
120
Buy 3 shares
1
150
Sell 1 share
2
150
Sell 1 share
3
150
Sell 1 share
a. Calculate the time-weighted geometric
average return on this portfolio. (Do not
round intermediate calculations. Round your...
Investor buys 200 shares of stock at $27.25 per share. Investor sells the stock after one...
Investor buys 200 shares of stock at $27.25 per share. Investor
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Joe sells his shares in BHP and buys shares in a tech stock
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Explain why.
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Que : Mary buys and sells ladies' handbags. She buys for cash and sells on one...
Que : Mary buys and sells ladies' handbags. She buys for cash
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A trader opens the following position: Buys the stock Buys two Jan 25 puts Sells three Jan 30 calls
S
K
Calls
Puts
NOV
DEC
JAN
NOV
DEC
JAN
25
20
-
-
7.30
.10
-
.55
25
22.50
3.20
3.40
-
.90
-
1.25
25
25
1.50
-
4.00
1.40
1.95
2.10
25
27.50
.60
.88
-
3.50
-
4.00
25
30
.16
.55
.90
5.10
5.40
5.50
A trader opens the following position:
Buys the stock
Buys two Jan 25 puts
Sells three Jan 30 calls
Based upon this information, what would the breakeven prices
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An investor buys 100 shares of a stock, shorts 60 call options
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An investor buys 100 shares of a stock, shorts 50 call options on the stock with...
An investor buys 100 shares of a stock, shorts 50 call options
on the stock with strike price of $80 and buys 50 put options on
the stock with strike price of $40. All options are one-year
European options. Draw a diagram illustrating the value of the
investor’s portfolio as a function of the stock price after one
year.
A share of stock sells for $50 today. The beta of the stock is .8, and...
A share of stock sells for $50 today. The beta of the stock is
.8, and the expected return on the market is 18 percent. The stock
is expected to pay a dividend of $.90 in one year. If the risk-free
rate is 4.9 percent, what should the share price be in one year?
(Do not round intermediate calculations. Round your answer
to 2 decimal places.)
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