The average rate of return on investments in large stocks has outpaced that on investments in...

The average rate of return on investments in large stocks has outpaced that on investments in Treasury bills by about 7% since 1926. Why, then, does anyone invest in Treasury bills?

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Q:1 The average rate of return on investments in large stocks has outpaced that on investments...

Q:1 The average rate of return on investments in large stocks has outpaced that on investments in Treasury bills by about 7% since 1926. Why, then, does anyone invest in Treasury bills?

The average return on large cap stocks has outpaced that of US Treasury bills by about...

The average return on large cap stocks has outpaced that of US Treasury bills by about 7% per year since 1926. Why, then, does anyone investment in Treasury Bills?

Assume that annual returns on large-company stocks are normally distributed with an average historical return of...

Assume that annual returns on large-company stocks are normally distributed with an average historical return of 12.3% and a standard deviation of 20.0%. What is the probability that annual return on large-company stocks is greater than 5% and Less than 30%?

a. Computer stocks currently provide an expected rate of return of 14%. MBI, a large computer...

a. Computer stocks currently provide an expected rate of return of 14%. MBI, a large computer company, will pay a year-end dividend of $3 per share. If the stock is selling at $60 per share, what must be the market's expectation of the growth rate of MBI dividends? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If dividend growth forecasts for MBI are revised downward to 4% per year, what will be the price of...

1) The average return for large-cap stocks have been around 9 or 10 percent. This is...

1) The average return for large-cap stocks have been around 9 or 10 percent. This is in a period where GDP growth has averaged 3 percent. How is this possible that stocks can produce a multiple of GDP growth? 2) If the "new normal" for GDP growth is 2% (or less) what would be your long-term average of future stock returns? Why? More interested in the answer to #2. Thanks.

Estimated Rate of Return on Alternative Investments State of Probability High U.S. Market 2-Stocks Economy of...

Estimated Rate of Return on Alternative Investments State of Probability High U.S. Market 2-Stocks Economy of State T-Bills Tech Collections Rubber Portfolio HT&Coll Recession 0.1 8.0% -22.0% 28.0% 10.0% -13.0% Below Average 0.2 8.0% -2.0% 14.7% -10.0% 1.0% Average 0.4 8.0% 20.0% 0.0% 7.0% 15.0% Above Average 0.2 8.0% 35.0% -10.0% 45.0% 29.0% Boom 0.1 8.0% 50.0% -20.0% 30.0% 43.0% E(R) 8.0% 1.7% 13.8% 15.0% Standard Deviation 0.0% 13.4% 18.8% 15.3% III. Calculate the E(R) of a portfolio consisting of...

1.5 Assume portfolio A has a collection of stocks that average a 12% return with a...

1.5 Assume portfolio A has a collection of stocks that average a 12% return with a standard deviation of 3% and portfolio B has an average return of 6% with a standard deviation of 2%. Which portfolio among the two assets would be considered riskier? 2 points None is these answers is correct Portfolio A Portfolio B Both Portfolio A and B

Computer stocks currently provide an expected rate of return of 15%. MBI, a large computer company,...

Computer stocks currently provide an expected rate of return of 15%. MBI, a large computer company, will pay a year-end dividend of $2.5 per share. (a) If the stock has an intrinsic value of $50 per share, what must be the market's expectation of the growth rate of MBI dividends? Use the constant growth model. (b) Based on the constant growth model, what is the intrinsic value of MBI in three years (V3)? (c) Suppose the dividend growth forecasts for...

Which of the investments discussed has had the highest average return and risk premium? I Which...

Which of the investments discussed has had the highest average return and risk premium? I Which of the investments discussed has had the highest standard deviation? I What is capital market efficiency? I What are the three forms of market efficiency?

(Stocks) A stock with the required rate of return of 13.54% is expected to pay a...

(Stocks) A stock with the required rate of return of 13.54% is expected to pay a $0.81 dividend over the next year. The dividends are expected to grow at a constant rate forever. The intrinsic value of the stock is $22.07 per share. What is the constant growth rate (in %, to the nearest 0.01%)? E.g., if your answer is 4.236%, record it as 4.24.

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