Part 2 (ch10) Questions Numeric
Last updated: 17/02/2025
Type your answers with “.” instead of “,”! For numerical answers, use 2 decimal places. For instance, if your answer is 0.12345 or 12.345%, type, “12.34” in the box.
Question 1
Q: You bought a stock one year ago for 9.944 per share and sold it today for 7.462. It paid a 1.077 per share dividend today.
What was your realized return?
How much of the return came from dividend yield and how much came from capital gain?
Dividend Yield:
Capital gain:
Answer:
1) -14.132. 2) 10.832. 3) -24.964
Question 2
Q: Suppose the market risk premium is 8 and the risk-free interest rate is 5.001. Calculate the cost of capital of investing in a project with a beta of 0.813?
Answer:
1) 11.503
Question 3
Q: You bought a stock for 51.65 per share and sold it later for 67.47. It paid 1.56 in dividends over the period.
What was your holding period return in percentage terms?
Answer:
1) 33.66
Question 4
Q: You bought a stock for 120.23 per share and sold it for 115.89 after 4 years. You received 1.14 in dividends per year.
What was your total return over the period?
What was your annualized return (CAGR)?
Answer:
1) 0.17. 2) 0.04
Question 5
Q: The past five annual returns of a stock were (in %): 7.01, 10.71, 2.52, 4.22, 11.74
What was the average return?
What was the standard deviation of the returns?
Answer:
1) 7.24. 2) 3.99