Question

The price per share of stock for a sample of 25 companies was recorded at the beginning of 2012 and then again at the end of the 1st quarter of 2012. How stocks perform during the 1st quarter is an indicator of what is ahead for the stock market and the economy. The sample data are provided in the Excel Online file below. Construct a spreadsheet to answer the following questions.

End of 1st Quarter | Beginning of Year |

26.13 | 18.71 |

39.61 | 34.36 |

54.90 | 43.98 |

60.62 | 59.43 |

67.86 | 62.98 |

108.68 | 104.84 |

31.21 | 21.91 |

13.85 | 9.11 |

44.51 | 39.32 |

21.47 | 15.51 |

33.83 | 29.04 |

23.95 | 16.68 |

51.91 | 40.44 |

47.28 | 30.55 |

69.91 | 64.41 |

40.23 | 38.82 |

73.12 | 60.50 |

41.67 | 39.86 |

33.36 | 24.06 |

75.41 | 68.37 |

70.16 | 51.90 |

89.03 | 83.26 |

25.55 | 18.94 |

31.56 | 23.88 |

108.61 | 104.60 |

**a.** Let denote the change in price
per share for company *i* where 1st quarter of
2012 price per share minus the beginning of 2012 price per share.
Use the sample mean of these values to estimate the dollar amount a
share of stock has changed during the 1st quarter

$ (to 2 decimals)

**b.** What is the 95% confidence interval estimate
of the population mean change in the price per share of stock
during the first quarter? Interpret this result.

Standard deviation (to 2 decimals): | |

Confidence interval (to 2 decimals): | (, ) |

The mean price per share has increase between % and % over the three-month period (to 1 decimal).

Answer #1

a) Let us denote

d = 1st quarter of 2012 price per share - the beginning of 2012 price per share

The mean price per share has increase between 5.4% and 8.9% over the three-month period

The price per share of stock for a sample of 25 companies was
recorded at the beginning of 2012 and then again at the end of the
1st quarter of 2012 (The Wall Street Journal, April 2, 2012). How
stocks perform during the 1st quarter is an indicator of what is
ahead for the stock market and the economy. Use the sample data in
the file entitled Stock Prices to answer the following.
a. Let d denote the change in...

The following frequency distribution shows the price per share
for a sample of 30 companies listed on the New York Stock Exchange.
Price per Share Frequency $20-29
5 $30-39 5 $40-49
7 $50-59 4 $60-69
6 $70-79 2 $80-89
1 Compute the sample mean price per share and the sample standard
deviation of the price per share for the New York Stock Exchange
companies (to 2 decimals). Assume there are no price per shares
between 29 and 30, 39 and...

The current market price of the stock is $70 per share. Merriam
has 900,000 shares authorized and 100,000 shares issued and
outstanding of $2 par value common stock. On December 1st, 2018,
the company declared and issued a 2-for-1 stock split.
1. How did the company record the stock split in the accounting
records on December 1st?
2. After the stock split, determine the new value for each of
the following items. a. Market Price/Share b. Impact on
Stockholder’s Equity...

The price of DEF Corp. stock is $50 per share and the call
option on the stock has a price of $10 and an exercise price of
$45, with a time to maturity of one year. Assume the risk-free rate
is 6%.
If the volatility of the stock is 20% during the year, use the
two-state model to derive the price of the option.

Suppose a stock had an initial price of $55 per share, paid a
dividend of $1.75 per share during the year, and had an ending
share price of $72. Compute the percentage total return.
rev: 09_20_2012
34.09
26.04
43.27
35.80

Suppose a stock had an initial price of $87 per share, paid a
dividend of $2.15 per share during the year, and had an ending
share price of $98.
a) Compute the percentage total return
b) What was the dividend yield?
c) What was the capital gains yield?

You purchased shares of stock one year ago at a price of $64.46
per share. During the year, you received dividend payments of $2.15
and sold the stock for $71.58 per share. If the inflation rate
during the year was 2.83 percent, what was your real return

8. You purchased shares of stock one year ago at a price of
$63.80 per share. During the year, you received dividend payments
of $2.03 and sold the stock for $70.92 per share. If the inflation
rate during the year was 2.59 percent, what was your real
return?

Suppose you bought 600 shares of stock at an initial price of
$41 per share. The stock paid a dividend of $0.36 per share during
the following year, and the share price at the end of the year was
$36.
a. Compute your total dollar return on this
investment
b. What is the capital gains yield?
c. What is the dividend yield?
d. What is the total rate of return on the investment?

You purchased shares of stock one year ago at a price of $63.47
per share. During the year, you received dividend payments of $1.97
and sold the stock for $70.59 per share. If the inflation rate
during the year was 2.47 percent, what was your real return?
Multiple Choice
10.35%
11.57%
17.15%
14.36%
8.54%

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