Spreadsheet Exercises 421 ii. Based on the information in Table 6-6, and assuming the risk information in this table applies to the 10-year period being considered here, is McDonald's more risky than the S&P 500, or less risky? h. What is the biggest single factor in explaining McDonald's returns for 2001 and 2002? i. For an investor who bought McDonald's stock on January 1, 2005 and held it to December 31, 2010, at what compound annual average rate of return did this investment in the stock grow? State your answer as a compound annual average percentage rate of return. j. Assume an investor invested $5,000 in McDonald's stock on January 1, 2001, and held it for 20 years. Also assume that the geometric mean for these 20 years is the same as the geometric mean for the 10 years 2001-2010. Including the initial investment, how much money would the investor have at the end of the 20 years? In other words, what is the cumulative wealth from this investment given an initial investment of $5,000? k. Calculate the compound annual average rate of return on McDonald's stock for the years 2001-2003. State your answer as a compound annual average % rate of return. I. Assume you purchased 100 shares of McDonald's stock on January 1, 2007, the year before the great financial crisis of 2008. Calculate the cumulative wealth of this position (which includes the starting amount) at the close of business on December 31, 2010 Ignore any brokerage costs. m. Assume that over the next five years the returns on the S&P 500 index are 6%, -2.5%, -4%, 5.2%, and 3.1%. (a) What will be the cumulative wealth per dollar invested in this index? (b) At what compound annual rate of return did your money grow if you invested in this index at the start of the five years? n. Assume that the information generated above is all the information you have about McDonald's rate of return. What would be the best estimate of the TR for McDonald's for 2011? What was the actual return? Clos Price Div 1 TR RR Div Yield 2010 2009 2008 2007 76.76 62.44 62.19 5727 2006 2005 2004 2003 2002 2001 2000 44.33 33.72 32.06 24.83 15.75 26.6 34 Spreadsheet Exercises 421 ii. Based on the information in Table 6-6, and assuming the risk information in this table applies to the 10-year period being considered here, is McDonald's more risky than the S&P 500, or less risky? h. What is the biggest single factor in explaining McDonald's returns for 2001 and 2002? i. For an investor who bought McDonald's stock on January 1, 2005 and held it to December 31, 2010, at what compound annual average rate of return did this investment in the stock grow? State your answer as a compound annual average percentage rate of return. j. Assume an investor invested $5,000 in McDonald's stock on January 1, 2001, and held it for 20 years. Also assume that the geometric mean for these 20 years is the same as the geometric mean for the 10 years 2001-2010. Including the initial investment, how much money would the investor have at the end of the 20 years? In other words, what is the cumulative wealth from this investment given an initial investment of $5,000? k. Calculate the compound annual average rate of return on McDonald's stock for the years 2001-2003. State your answer as a compound annual average % rate of return. I. Assume you purchased 100 shares of McDonald's stock on January 1, 2007, the year before the great financial crisis of 2008. Calculate the cumulative wealth of this position (which includes the starting amount) at the close of business on December 31, 2010 Ignore any brokerage costs. m. Assume that over the next five years the returns on the S&P 500 index are 6%, -2.5%, -4%, 5.2%, and 3.1%. (a) What will be the cumulative wealth per dollar invested in this index? (b) At what compound annual rate of return did your money grow if you invested in this index at the start of the five years? n. Assume that the information generated above is all the information you have about McDonald's rate of return. What would be the best estimate of the TR for McDonald's for 2011? What was the actual return? Clos Price Div 1 TR RR Div Yield 2010 2009 2008 2007 76.76 62.44 62.19 5727 2006 2005 2004 2003 2002 2001 2000 44.33 33.72 32.06 24.83 15.75 26.6 34