Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / 1)You purchased a share of stock for $1000
1)You purchased a share of stock for $1000. One year later you received $20 as a dividend and sold the share for $1050. The rate of inflation was 3% and the risk free rate was 4% over the year. Which of the following is/are true. Select one or more: A. Excess return is 3%. B. Real return is 4%. C. Capital return is 7%. D. Income return is 2%. E. Holding period return is 5%.
2)
Which of the following is/are negatively related to the weight in the risk free asset in the optimal complete portfolio? Select one or more: A. Risk free rate B. Preference for the risk C. Expected return of the optimal risky portfolio D. Correlation between the optimal risky portfolio and the risk free asset E. Standard deviation of the optimal risky portfolio
1)
Dear Student,
Please note the solution
Answer: - D Income Return 2%
Dividend income - $20
Stock purchase - $1000
Stock sold - $1050
Holding period - 1 year
= $20/$1000*100 = 2%
Please provide your suggestions w.r.t improvement in answers.
Your suggestion matters
Happy Chegging!
Stay Safe!!
2)Risk free rate and Standard deviation of optimal risky portfolio are negatively related to the weight in the risk free asset in optimal complete portfolio . All other options are positively correlated.
