Calculate the total returns (TR) and the return relatives (RR) in term of Euro for the following

 

assets:

i. A preferred stock bought for 70 per share, held one year during which 5 per dividend

are collected and sold for 62.

ii. A 12 percent bond bought for 830, held two years during which interest is collected,

and sold for 920 (assume no reinvestment).

iii. Calculate the international returns (in term of Dollar) for question (i) and (ii) if Euro

appreciate from $1.25/ to 1.35/.

2. Bond A'a return from 2001 - 2004: -11.85%, -22.10%, 28.37%, and 10.75% respectively.

i. Calculate the arithmetic and geometric mean rate of return of bond A

ii. If you had invested $100,000 in Bond A since beginning of year 2001, determine the

value of this bond at the end of 2004.

iii. Calculate the standard deviation of Bond A

Answer rating: 100% (QA)

1 Preferred Stock Bought for 70 Euros per share Held for one year collected 5 Euros per dividend Sol... View the full answer