Choose three NYSE-listed stocks and maintain a record of their dividend payments, if any, and closing prices
Question:
Choose three NYSE-listed stocks and maintain a record of their dividend payments, if any, and closing prices each week over the next six weeks.
a. At the end of the six-week period, calculate the one-week HPRs for each stock for each of the six weeks.
b. For each stock, average the six weekly HPRs calculated in part a and compare them.
c. Use the averages you computed in part b and compute the standard deviation of the six HPRs for each stock. Discuss the stocks’ relative risk and return behavior. Did the stocks with the highest risk earn the greatest return?
Step by Step Answer:
a The oneweek HPRs for the 1st stock 0094 for the 2nd stock 0024 for the 3rd stock 0025 for the 4t...View the full answer
Fundamentals Of Investing
ISBN: 9780135175217
14th Edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
Related Video
Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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