Q.1.You bought a share of 3 percent preferred stock for $96.67 last year. The market price for your stock is now $98.43 What was your total return for last year? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Total return % Q2. You’ve observed the following returns on Mary Ann Data Corporation’s stock over the past five years: 10 percent, –10 percent, 17 percent, 22 percent, and 10 percent. Suppose the average inflation rate over this period was 1.5 percent and the average T-bill rate over the period was 3.0 percent. What was the average real risk-free rate over this time period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Average real risk-free rate % What was the average real risk premium? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Average real risk premium % Q3.Consider the following rates of return: Year Large Company US Treasury Bill 1 3.99 % 6.65 % 2 14.50 4.46 3 19.39 4.33 4 –14.29 7.34 5 –31.78 5.44 6 37.10 6.45 ________________________________________ Calculate the standard deviation of the returns for large-company stocks and T-bills over this period.(Do not round intermediate cal
culations and round your final answers to 2 decimal places. (e.g., 32.16)) Standard deviation Large company stocks % T-bills % ________________________________________ c-1 Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the arithmetic average risk premium over this period? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Average risk premium % c-2 Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the standard deviation of the risk premium over this period? (Round your answer to 2 decimal places. (e.g., 32.16)) Standard deviation % Q4. Returns Year X Y 1 13 % 18 % 2 27 28 3 – 20 – 25 4 8 10 5 10 19 ________________________________________ Using the returns shown above, calculate the average returns, the variances, and the standard deviations for X and Y (Do not round intermediate calculations and round your final percentage answer to 2 decimal places. (e.g., 32.16) and variances to 5 decimal places. (e.g., 32.16161)) X Y Average returns % % Variances Standard deviations % % ________________________________________