Return and risk of small-company stocks

Assignment Help Accounting Basics
Reference no: EM13116051

Carib and Heinekin have reported the returns on small company stocks and U.S. Treasury bills for the period 1986 - 1991 as follows

Year small company stocks u.s treasury bills

1986 6.85% 6.16%
1987 -9.30 5.47
1988 22.87 6.35
1989 10.18 8.37
1990 -21.56 7.81
1991 44.63 5.60

a. Calculate the average returns on small-company stocks and u.s. treasury bills.

b. Calculate the variances and standard deviations of the returns on small-company stocks and u.s. treasury bills.

c. Compare the returns and risks of these two types of securities.

Reference no: EM13116051

Questions Cloud

Effect of independent variable on dependent variable : Stalnaker technique: what effect does the independent variable have on the dependent variable? type of hypothesis? what is independent variable? dependent variable?
What are rflps, vntrs and snps : What are RFLPs, VNTRs, and SNPs? What is the relationship among these? How do we use this technology to, for example, identify paternity?
Explain what is meant by the term corporate governance : What is meant by the term corporate governance? How does corporate governance impact financial planning? How can organizations manage this impact?
What is hemophilia : What is hemophilia and why can females, but not males, be carriers of hemophilia and other X-linked recessive characteristics?
Return and risk of small-company stocks : Calculate the average returns on small-company stocks and u.s. treasury bills. Calculate the variances and standard deviations of the returns on small-company stocks and u.s. treasury bills.
Portfolio management for personal financial planning : Explain some disadvantages of Cliff's current investment approach. Construct a portfolio for Cliff, limiting your selections to mutual funds (assume that he sells his current stock and bond holdings). Make sure your plan indicates specific dollar a..
Find probability that total weight of eight people exceeds : What is the probability that the total weight of eight people exceeds 1300 pounds? 1500 pounds? (Assume that the probability distribution is approximately normal).
What is the boiling point of molal solution of sugar : What is the boiling point of a 0.800 molal solution of sugar in water? Kb = 0.512C/m for water. Sugar does not dissociate in solution and pure water boils at 100C.
Computing price of forward contract : What is the forward price of your contract? Suppose both the 1-year and 11-year spot rates unexpectedly shift downward by 2 percent. What is the price of a forward contract otherwise identical to yours?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd