Blog

Assume the real rate of return in the economy is 3.6 percent, the expected rate of inflation is 4.9 percent, and the risk premium is 5.5 percent. Compute the required rate of return.(Be sure to give the EXACT rate, not the approximate rate).

Suppose a stock had an initial price of $83 per share, paid a dividend of $3.75 per share during the year, and had an ending share price of $103. Compute the percentage total return.

Allan purchased 700 shares of stock on margin for $16.50 a share and sold the shares twelve months later for $17.80 a share. The initial margin requirement was 70 percent and the maintenance margin was 40 percent. The interest rate on the margin loan was 6.7 percent. He received no dividend income. What was his rate of return?

You short-sell 290 shares of Meadowcreek Co. now selling for $76.50 per share. If you want to limit your loss to $2,146, you should place a stop-buy order at ________.

A benchmark index has three stocks priced at $15, $78, and $33. The number of outstanding shares for each is 494,000 shares, 580,000 shares, and 304,000 shares, respectively. If the market value weighted index was 700 yesterday and the prices changed to $16.40, $81.40, and $36.80 today, what is the new index value?

Contributions to a traditional retirement plan are ________, and contributions to a Roth retirement plan are ________.

Suppose a stock had an initial price of $56 per share, paid a dividend of $2.25 per share during the year, and had an ending share price of $70. Compute the percentage total return.

A stock has produced returns of 24 percent, 15 percent, –43 percent, and 38 percent over the past four years, respectively. What is the geometric average return?

Value firms typically have ___________ P/E ratios than growth firms. On average, over time, value stocks tend to have ______________ returns than growth stocks.

Which of the following comparisons CANNOT be made using ratio analysis.