# Assignment 5 text edition 7 chapter 12 – questions and problems – 5 7

Assignment 5

Don't use plagiarized sources. Get Your Custom Essay on
Assignment 5 text edition 7 chapter 12 – questions and problems – 5 7
Just from \$13/Page

Text edition 7:

Chapter 12 – Questions and Problems – 5, 7, 8, 9, 12, 13.

Rubric Assignment 5:

Calculation Questions. Show your work – include formulas and step by step calculations.

5. Nominal versus Real Returns: What is the average annual return on Canadian stock from 1957 through 2008:

a. In nominal terms?

b. In real terms?

7.  Calculating Returns and Variability: Using the following returns, calculate the arithmetic average returns, the variances and the standard deviations for X and Y.

Returns

Year                            X                                  Y

1                                  6%                              18%

2                                  24                                39

3                                  13                                -6

4                                  -14                              -20

5                                  15                                47

8.  Risk Premiums: Refer to the table attached and look at the period from 1970-1975.

a. Calculate the arithmetic average returns for large-company stocks and T-Bills over this period.

b. Calculate the standard deviation of the returns for large-company stocks and T-Bills over this period.

c. Calculate the observed risk premium in each year for the large-company stocks versus T-Bills. What was the average risk premium over this period? What was the standard deviation of the risk premium over this period?

d. Is it possible for the risk premium to be negative before an investment is undertaken? Can the risk premium be negative after the fact?

9. Calculating Returns and Variability: You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past 5 years: 2 percent, -8 percent, 24percent, 19 percent and 12 percent.

a. What was the arithmetic average return on Crash-n-Burn’s stock over this 5-year period?

deviation?

12.  Effects of Inflation: Look at table 12.1 (same table from Q8) and the attached figure (12.4), When were T-bill rates at their highest over the period of 1957 through 2008? Why do you think they were so high during this period? What relationship underlies your answer?

13.  Calculating Investment Returns: You bought one of Great White Shark Repellant Co’s 7 percent coupon bonds one year ago for \$920. These bonds make annual payments and mature in six years from now. Suppose you decide to sell your bonds today, when the required return on bonds is 8 percent. If the inflation rate was 4.2 percent over the past year, what was your total real return on investment?

Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.

### Free-revision policy

The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.

### Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors: