11 Jan Compute each stock’s average

1.

FedEx Corp. stock ended the previous year at $108.19 per share. It paid a $0.50 per share dividend last year. It ended last year at $111.49.

If you owned 340 shares of FedEx, what was your dollar return and percent return?(Round your percent return answer to 2 decimal places.)

2.

A Treasury bond that you own at the beginning of the year is worth $1,095. During the year, it pays $47 in interest payments and ends the year valued at $1,105.

What was your dollar return and percent return?(Round your percent return answer to 2 decimal places.)

3.

Rank the following three stocks by their risk-return relationship, best to worst. Rail Haul has an average return of 12 percent and standard deviation of 38 percent. The average return and standard deviation of Idol Staff are 15 percent and 26 percent; and of Poker-R-Us are 9 percent and 30 percent.

4.

An investor owns $11,000 of Adobe Systems stock, $12,000 of Dow Chemical, and $12,000 of Office Depot. What are the portfolio weights of each stock?(Round your answers to 4 decimal places.)

5.

Year-to-date, Yum Brands had earned a 3.30 percent return. During the same time period, Raytheon earned 4.38 percent and Coca-Cola earned ?0.49 percent.

If you have a portfolio made up of 30 percent Yum Brands, 20 percent Raytheon, and 50 percent Coca-Cola, what is your portfolio return?(Round your answer to 2 decimal places.)

6.

The past five monthly returns for Kohls are 3.94 percent, 4.62 percent, ?2.08 percent, 9.45 percent, and ?2.96 percent. What is the average monthly return?(Round your answer to 3 decimal places.)

7.

The past five monthly returns for PG&E are ?3.51 percent, 4.73 percent, 4.11 percent, 6.98 percent, and 3.92 percent. Compute the standard deviation of PG&E’s monthly returns.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)

8.

Table 9.2 Average Returns for Bonds

Bonds

1950 to 1959

Average

0.0

%

1960 to 1969

Average

1.7

1970 to 1979

Average

5.2

1980 to 1989

Average

13.5

1990 to 1999

Average

9.8

2000 to 2009

Average

8.5

Table 9.4 Annual Standard Deviation for Bonds

Bonds

1950 to 1959

4.5

%

1960 to 1969

6.4

1970 to 1979

6.7

1980 to 1989

15.5

1990 to 1999

12.7

2000 to 2009

10.3

Use the tables above to calculate the coefficient of variation of the risk-return relationship of the bond market during each decade since 1950.(Round your answers to 2 decimal places.)

9.

Table 9.2 Average Returns for Bonds

Low-risk bonds

1950 to 1959

Average

2.3

%

1960 to 1969

Average

4.1

1970 to 1979

Average

6.6

1980 to 1989

Average

8.6

1990 to 1999

Average

5.4

2000 to 2009

Average

2.9

Table 9.4 Annual Standard Deviation for T-Bills

Low-risk bonds

1950 to 1959

0.6

%

1960 to 1969

1.4

1970 to 1979

2.4

1980 to 1989

2.6

1990 to 1999

1.1

2000 to 2009

2.1

Use the tables above to calculate the coefficient of variation of the risk-return relationship in T-bills during each decade since 1950.(Round your answers to 2 decimal places.)

10.

If you own 600 shares of Alaska Air at $58.48, 650 shares of Best Buy at $66.92, and 400 shares of Ford Motor at $9.16, what are the portfolio weights of each stock?(Round your answers to 3 decimal places.)

11.

If you own 400 shares of Xerox at $18.74, 500 shares of Qwest at $9.55, and 300 shares of Liz Claiborne at $46.13, what are the portfolio weights of each stock?(Round your answers to 3 decimal places.)

12.

At the beginning of the month, you owned $8,000 of General Dynamics, $7,000 of Starbucks, and $5,000 of Nike. The monthly returns for General Dynamics, Starbucks, and Nike were 6.80 percent, ?1.52 percent, and ?0.62 percent. What is your portfolio return?(Do not round intermediate calculations. Round your final answer to 2 decimal places.)

13.

The table below shows your stock positions at the beginning of the year, the dividends that each stock paid during the year, and the stock prices at the end of the year.

Company

Shares

Beginning of
Year Price

Dividend
per Share

End of
Year Price

Johnson Controls

400

$

73.81

$

1.35

$

86.37

Medtronic

300

58.47

0.59

54.41

Direct TV

600

25.84

25.29

Qualcomm

200

43.98

0.48

39.82

What is your portfolio dollar return and percentage return?(Round your answers to 2 decimal places.)

14.

Consider the following annual returns of Estee Lauder and Lowe’s Companies:

Estee Lauder

Lowe’s Companies

Year 1

24.9

%

?

9.0

%

Year 2

?

34.0

17.6

Year 3

19.1

5.7

Year 4

51.4

54.0

Year 5

?

18.3

?

24.0

Compute each stock’s average return, standard deviation, and coefficient of variation.(Round your answers to 2 decimal places.)

15.

Consider the following annual returns of Molson Coors and International Paper:

Molson Coors

International Paper

Year 1

22.8

%

5.8

%

Year 2

?

9.7

?

18.8

Year 3

43.0

?

0.6

Year 4

?

9.5

27.9

Year 5

17.5

?

12.4

Compute each stock’s average return, standard deviation, and coefficient of variation.(Round your answers to 2 decimal places.)