Question: Calculate the average continuous monthly returns for the following dividend adjusted share price and market index. DateShare Price (Ri)Market Index (Rm) August-20$2.75 1,285.00 September-20$2.90 1,290.00

Calculate the average continuous monthly returns for the following dividend adjusted share price and market index.

DateShare Price (Ri)Market Index (Rm)

August-20$2.75 1,285.00

September-20$2.90 1,290.00

October-20$2.95 1,340.00

November-20$3.25 1,360.00

(a)Has this share under or over performed relative to the market?

(b)Suppose the share's beta is 1.5 (b = 1.5) and the annual risk-free rate is 0.03. If you accept that past performance gives you the best guide to future returns, would you invest in this share? Briefly explain your decision.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

21. A building supplies distributor purchased a gasoline-powered fork-lift truck 4 years ago for $8,000. At that time, the estimated useful life was 8 years with a salvage value of $800 at the end of...

Calculate the average continuous monthly returns for the following dividend adjusted share price and market index. Date Share Price (Ri) Market Index (Rm) August-20 $2.75 1 285.00 September-20 $2.90...

Calculate the average continuous monthly returns for the following dividend adjusted share price and market index. Date Share Price (Ri) August-20 $2.75 September-20 $2.90 October-20 $2.95...

1. Calculate the cost of each capital component, after-tax cost of debt, cost of preferred, and cost of equity with the DCF method and CAPM method. 2. What do you estimate the company?s WACC? Please...

Hi, can you prepare this assignment for me, please. it's a presentation about company Coca-Cola Amatil (Australia) base on 3 annual reports and complete all the task requirement...

Hello, I need help with the highlighted questions(I, J, and K). Also, can you please explain how you completed the regression part. The assignment is Week 5 assignment. The other documents are from...

Please Provide a 2 to 3 page article review for each, there attached on this question. Your discussion should include a brief summary (including the big ideas or major points of the article) along...

Please provide a maximum one-page summary of how we can analyze the cost of capital for our project (below) vis--visthe peer-reviewed research article attached. Consider risk as you decide. What...

1. What is the issue being addressed in the paper? 2. What are the findings of the paper? 3. Why is this paper important to auditors, and what are the implications of this paper for the auditing...

I am looking for the correct answer for this Q .. Can you help me :) I need also steps with Calculatorplz Thanks....

Hi again, I was hoping you can help with this investment management assignment. I am attaching the word document. It is 4 problems about asset management. Thank you for your help! Fin 6310 1. Assume...

This reaction involves an oxidation or Reduction? This reaction involves an oxidation or NaCNBH,, HO reduction? (circle one) pH 4-5 HO, cat. HCI HO, HO OH Daniel Romo Reaction Mechanisms Basic...

A potential difference of 4.80kV is established between parallel plates in air. Part A If the air becomes ionized (and hence electrically conducting) when the electric field exceeds 3.00

Beckingcom Modfee Security Training Operational Tools Aberta Resources S 2 0 1 5 : GHS Tutorial What is the meaning of this pictogram? Corrosion Hazard - for corrosive damage to metals as well as skin

The number of surface flaws in plastic panels used in the interior of automobiles has a Poisson distribution with a mean of 0.05 flaw per square foot of plastic panel. Assume an automobile interior...

We know a car costs 60 monthly payments of $199. The car dealer has set us a nominal interest rate of 4.5% compounded daily. What is the purchase price of the car?

A cylinder/piston arrangement contains 5 kg of water at 100C with x 20% and the piston, mP 75 kg, resting on some stops, similar to Fig. P5.35, the outside...

The local Audubon Society has just put a new bird feeder in the park at a cost of $500. The feeder has a useful life of 5 years and an annual maintenance cost of $50. Our cat, Fred, was very...

How much the owner of a building would be justified in paying for a sprinkler system that will save $750 a year in insurance premiums if the system has to be Replace every 20 years and has a salvage...

If the optimal solution to this LP problem is unique and has all of its decision variables ( x) basic and if the optimal tableau is Determine how to construct A,b and c from the columns g and h and...

The geographical location of the sender, i.e. where the sender resides

Subjective norms, i.e. the norms of the target group

The temporal rule: The closer temporal proximity we have to an event or action, the more probable it is that the distortion of information is less than if the event or action happened longer ago.