1. Calculating returns & 2. calculating yields

leaving you with just 3 percent. Once you consider inflation and taxes, how does the long-term return from Treasury bills look? 10. The Long Run (L04, CFA2) Given your answer to the last question and the discussion in the chapter, why would any rational person do anything other than load up on 100 percent small stocks? Questions and Problems 1. Calculating Returns (LOI, CFA1) Suppose you bought 100 shares of stock at an initial price of $37 per share. The stock paid a dividend of $0.28 per share during the following year, and the share price at the end of the year was $41. Compute your total dollar return on this investment. Does your answer change if you keep the stock instead of selling it? Why or why not? 2. Calculating Yields (L01, CFA1) In Problem 1, what is the capital gains yield? The dividend yield? What is the total rate of return on the investment? 3. Calculating Returns (L01, CFA1) Rework Problems 1 and 2 assuming that you buy 500 shares of the stock and the ending share price is $34. 4. Historical Returns (LO3) What is the historical rate of return on each of the following investments? What is the historical risk premium on these investments? a. Long-term government bonds b. Treasury bills c. Large stocks d. Small stocks