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Homework answers / question archive / a)
a). Initial value of index (using price-weighted scheme) = sum of price per share of all stocks/number of stocks
= (103+45+74)/3 = 74
b). Index value as of 1/1/20 = (106+39+63)/3 = 69.33
2019 return = (2020 value - 2019 value)/2019 value = (69.33-74)/74 = -6.31%
Index value as of 1/1/21 = (118+53+79)/3 = 83.33
2020 return = (2021 value - 2020 value)/2020 value = (83.33-69.33)/69.33 = 20.19%
| K = Nx2 |
| Bond Price =∑ [(Semi Annual Coupon)/(1 + YTM/2)^k] + Par value/(1 + YTM/2)^Nx2 |
| k=1 |
| K =15x2 |
| Bond Price =∑ [(9*1000/200)/(1 + 10/200)^k] + 1000/(1 + 10/200)^15x2 |
| k=1 |
| Bond Price = 923.14 |
| Using Calculator: press buttons "2ND"+"FV" then assign |
| PMT = Par value * coupon %/coupons per year=1000*9/(2*100) |
| I/Y =10/2 |
| N =15*2 |
| FV =1000 |
| CPT PV |
| Using Excel |
| =PV(rate,nper,pmt,FV,type) |
| =PV(10/(2*100),2*15,-9*1000/(2*100),-1000,) |
| K = Nx2 |
| Bond Price =∑ [(Semi Annual Coupon)/(1 + YTM/2)^k] + Par value/(1 + YTM/2)^Nx2 |
| k=1 |
| K =14x2 |
| Bond Price =∑ [(9*1000/200)/(1 + 8/200)^k] + 1000/(1 + 8/200)^14x2 |
| k=1 |
| Bond Price = 1083.32 |
| Using Calculator: press buttons "2ND"+"FV" then assign |
| PMT = Par value * coupon %/coupons per year=1000*9/(2*100) |
| I/Y =8/2 |
| N =14*2 |
| FV =1000 |
| CPT PV |
| Using Excel |
| =PV(rate,nper,pmt,FV,type) |
| =PV(8/(2*100),2*14,-9*1000/(2*100),-1000,) |
| rate of return/HPR = ((Selling price+Number of Coupon amount*Coupon amount)/Purchase price-1) |
| =((1083.32+2*45)/923.14-1) |
| =27.1% |
