# Question: Nano Motors Corp has stock outstanding which sells for 10 per

Nano-Motors Corp. has stock outstanding which sells for $10 per share. Macro-Motors Inc. shares cost $50 each. Neither stock pays dividends at present.

a. An investor buys 100 shares of Nano-Motors. A year later the stock sells for $15. Calculate the total return in dollar terms and in percentage terms.

b. Another investor buys 100 shares of Macro-Motors stock. A year later the stock has risen to $56. Calculate the total return in dollar terms and in percentage terms.

c. Why is it difficult to say which investor had a better year?

a. An investor buys 100 shares of Nano-Motors. A year later the stock sells for $15. Calculate the total return in dollar terms and in percentage terms.

b. Another investor buys 100 shares of Macro-Motors stock. A year later the stock has risen to $56. Calculate the total return in dollar terms and in percentage terms.

c. Why is it difficult to say which investor had a better year?

## Answer to relevant Questions

David Rawlings pays $1,000 to buy a five-year Treasury bond that pays a 6% coupon rate (for simplicity, assume annual coupon payments). One year later, the market’s required return on this bond has increased from 6% to 7%. ...The following data shows the rate of return on stocks and bonds for several recent years. Calculate the risk premium on equities vs. bonds each year, and then calculate the average risk premium. Do you think that at the ...The table below shows annual returns for Merck and one of its major competitors, Eli Lilly. The final column shows the annual return on a portfolio invested 50% in Lilly and 50% in Merck. The portfolio’s return is simply a ...A stock has a beta equal to 1.0. Is the standard deviation of the stock equal to the standard deviation of the market? Calculate the expected return, variance, and standard deviation for the stocks in the table below. Next, form an equally weighted portfolio of all three stocks and calculate its mean, variance, and standard deviation.Post your question