Returns and Averages
Six months ago, you purchased 1,400 shares of ABC stock for $45.40 a share. You have received dividend payments equal to $0.80 a share. Today, you sold all your shares for $50.25 a share.
What is your dollar return on this investment?
$5.65
If you own 200 shares of Alaska Air at $25.31, 400 shares of Best Buy at $13.51, and 450 shares of Ford Motor at $57.12, what is the portfolio weight of Alaska Air?
13.98%
The risk-free rate of return is 4% and the market risk premium is 8%. What is the expected rate of return on a stock with a beta of 1.28?
14.24%
What annual rate of return is earned on a $2,000 investment when it grows to $4,300 in seven years?
11.56%
Suppose you deposit $1,000 in an account paying 10% annual interest. How much money will be in your account in 5 years?
$1,610.51
Six months ago, you purchased 1,400 shares of ABC stock for $45.40 a share. You have received dividend payments equal to $0.80 a share. Today, you sold all your shares for $50.25 a share.
What is your percentage return on this investment?
12.44%
If you own 200 shares of Alaska Air at $25.31, 400 shares of Best Buy at $13.51, and 450 shares of Ford Motor at $57.12, what is the portfolio weight of Ford Motors?
71.09%
Assume that the risk-free rate is 5 percent, and that the market risk premium is 7 percent. If a stock has a required rate of return of 13.75 percent, what is its beta?
1.25
According to the rule of 72, if my investment is earning 12% annually, it will take years for me to double my money.
6 years
If we deposit $6,000 today in an account paying 9%, how long does it take to grow to $12,000?
8.04 years
What is the arithmetic average for a stock with annual returns of 21%, 8%, -32%, 41%, and 5%?
8.60%
Given the data in Item 1, what is your portfolio return?
2.54%
A stock has an expected return of 12.25 percent. The beta of the stock is 1.15 and the risk-free rate is 5 percent. What is the market risk premium?
6.30%
How much would an investor have to set aside today in order to have $30,000 ten years from now if the current rate is 10%?
$11,566.30
Assume the total cost of a college education will be $60,000 when your child enters college in 18 years. You have $15,000 to invest today. What rate of interest must you earn on your investment to cover the cost of your child’s education?
8.01%
What is the geometric average return for a stock with annual returns of 21%, 8%, -32%, 41%, and 5%?
5.64%
Given the information in Item 2, compute the expected return for each stock.
Stock A: 7.00%
Stock B: 6.60%
Given the information in Item 3, what is the weighted Beta for Stock B?
0.30
Approximately how many years are needed to double a $300 investment when interest rates are 12.64 percent per year?
5.70 years
How many years (and months) will it take $2 million to grow to $4 million with an annual interest rate of 7 percent?
10 years & 2.94 months
What is the standard deviation for a stock with annual returns of 21%, 8%, -32%, 41%, and 5%?
0.27
Given the information in Item 2, what is the expected return on a portfolio comprised of $3,000 in stock A and $5,000 in stock B?
6.75%
Given the information in Item 3, what is the beta for the portfolio?
1.04
Compute the present value of a $1000 payment made in nine years when the discount rate is 13 percent.
$332.88
Compute the value in 100 years of a $2,000 deposit earning 10 percent per year.
$27,561,224.68