The price of a stock was $10 at the end of September, $15 at the end...

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The price of a stock was $10 at the end of September, $15 at the end of October, and $7.50 at the end of November. What was the return for October? What was the return for November? What was the total return over October and November? Suppose the stock paid a $1 dividend at the end of November. How do your answers change? b. A stock has returns of -2% every month. What is the total return over 1 year? What is the total return over 10 years? c. Suppose a stock has returns of -3% for half the weeks in a year and +4% for the other half of the weeks. What is the total return for this stock over the year? d. A stock has a total return of 5% over the course of 5 trading days (Mon-Fri). The stock had the same return (r) for each of these days. Solve for r. Explain why r is not equal to 1%. Question 2 Suppose you deposit $100 in a savings account today (t = 0). In seven months, you expect that the value of your deposit will be $101. What is the constant monthly interest rate (r) for this account? What will be the future value of your deposit in 2 years? Question 3 Suppose you currently (t = 0) have $5,000. Your bank pays a monthly interest rate of 0.2% per month, compounding interest monthly. If you make no additional withdrawals or deposits, what will be the future value of your account in 3 years? Question 4 Suppose I give you a choice of getting either $10 thousand today or getting $15 thousand in 7 years. Assume the discount rate (r) is 10%. Which option do you prefer? Question 5 Suppose you have $1000 you want to invest in the stock market. Based on your analysis of historical data, you think returns for the stock market will be 7% every year. How long do you expect it will take your initial investment to double in value? How much does your answer change if returns turn out to be 6% per year? The price of a stock was $10 at the end of September, $15 at the end of October, and $7.50 at the end of November. What was the return for October? What was the return for November? What was the total return over October and November? Suppose the stock paid a $1 dividend at the end of November. How do your answers change? b. A stock has returns of -2% every month. What is the total return over 1 year? What is the total return over 10 years? c. Suppose a stock has returns of -3% for half the weeks in a year and +4% for the other half of the weeks. What is the total return for this stock over the year? d. A stock has a total return of 5% over the course of 5 trading days (Mon-Fri). The stock had the same return (r) for each of these days. Solve for r. Explain why r is not equal to 1%. Question 2 Suppose you deposit $100 in a savings account today (t = 0). In seven months, you expect that the value of your deposit will be $101. What is the constant monthly interest rate (r) for this account? What will be the future value of your deposit in 2 years? Question 3 Suppose you currently (t = 0) have $5,000. Your bank pays a monthly interest rate of 0.2% per month, compounding interest monthly. If you make no additional withdrawals or deposits, what will be the future value of your account in 3 years? Question 4 Suppose I give you a choice of getting either $10 thousand today or getting $15 thousand in 7 years. Assume the discount rate (r) is 10%. Which option do you prefer? Question 5 Suppose you have $1000 you want to invest in the stock market. Based on your analysis of historical data, you think returns for the stock market will be 7% every year. How long do you expect it will take your initial investment to double in value? How much does your answer change if returns turn out to be 6% per year?

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Question 1 a The return for October can be calculated as follows Return for October Ending price Beginning price Beginning price 15 10 10 50 b The return for November can be calculated as follows Retu... View the full answer