Compute the dollar-weighted and the time-weighted rate

Assignment Help Finance Basics
Reference no: EM13301173

An investors buys 2 shares of a stock at $85 at t=0, and at the end of the year (t=1), he buys 1 additional share for $72. At the end of year (t=2), he sells both shares for $97 each. At the end of first year (t=1), the stock paid a $2.50 dividend per share and $3.00 dividend at the end of the second year (t=2).

Compute the dollar-weighted and the time-weighted rate of return.

a. On each trading day, a portfolio manager has 25% chance of earning a return that is equal to or greater than the market. What is the probability that the portfolio manager will underperform (earn a return that is lower than) the market in 4 out of 5 weekly trading days. (This is a binomial probability distribution problem).

b. The portfolio manager of open-end mutual fund estimates on the average that 5,000 investors will redeem shares from the fund in a month. The average total redemption per investor is $20,000. What is the probability that at least 1 investor will make a redemption on a given trading day.

 

Reference no: EM13301173

Questions Cloud

Determine the coil resistance of the motor : A vacuum cleaner is plugged into a 120.0-V socket and uses 4.1 A of current in normal operation, Find the coil resistance of the motor
Find and include a current organizational chart : Part IV- Internal Assessment (B) Find and include a current organizational chart for your company. Then create an improved organizational chart, followed by an explanation of why these changes would improve the company. This will require you to inclu..
What is the project regular payback : The project's NPV is $75,000 and the company's WACC is 10%. What is the project's regular payback?
Probability calculations reveal the following information : Probability calculations reveal the following information. The probability of a favourable research report = 0.59. The probability of high sales given a favourable research report = 0.95. The probability of high sales given an unfavourable research r..
Compute the dollar-weighted and the time-weighted rate : The average total redemption per investor is $20,000. What is the probability that at least 1 investor will make a redemption on a given trading day.
A unknown amount of arsenic trichloride and the rest inerts : A 1.304 gram sample containing an unknown amount of arsenic trichloride and the rest inerts was dissolved into a NaHCO3 and HCl aqueous solution. To this solution was added 1.500 grams of KI and 50.00 mL of a 0.00919 M KIO3 solution.
Compute the length of the rotating string : A string trimmer is a tool for cutting grass and weeds; it utilizes a length of nylon "string" that rotates about an axis perpendicular to one end of the string. What is the length of the rotating string
Calculate the probability that the consultant receive : The probability that a call-centre consultant receives 3 calls during any given hour is 0.1404 and the probability that the consultant receives 5 calls during any given hour is 0.1755.  Assuming that the calls are Poisson-distributed, calculate the p..
Explain elevation pressure 0 ft 760 mmhg 1000ft : Elevation Pressure 0 ft 760 mmHg 1000ft 740.2 mmHg 2000ft 720.4 mmHg What is the boiling point of water at an elevation of 6.00×10^3 ft

Reviews

Write a Review

Finance Basics Questions & Answers

  Should the company proceed with the new project

The CCA rate on fixtures and equipment is 30%. The companys tax rate is 40% and its cost of capital is 12%. Should the company proceed with the new project?

  What is the standard deviation of the complete portfolio

Consider the following capital market: a risk-free asset yielding 1.75% per year and a mutual fund consisting of 65% stocks and 35% bonds. The expected return on stocks is 12.50% per year and the expected return on bonds is 3.25% per year. The standa..

  What invovement would nonfinancial people

What invovement would nonfinancial people such as those in marketing, accounting, and production have in the analysis ?

  Junk bond market and capital structure choice

The development of the new issue junk bond market had important implications for capital structure choice.

  Computation of after-cash tax and present value

Computation of after-cash tax and present value of JSC Corporation is attempting to determine whether to lease or purchase research equipment

  Why does not a political equilibrium lead to efficiency

Why does not a political equilibrium lead to efficiency in the way that equilibrium in private goods markets does.

  Compute the maximum price per share

Newman Manufacturing is planning a cash purchase of the stock of Grip Tool. During the year just completed, Grips earned $4.25 par share and paid cash dividends of $2.55 per share.

  What is the call option price

Suppose the spot exchange rate is $1.43 per British pound and the strike on a dollar denominated pound call is $1.30. Assume r = 0.045, rf = 0.06, ? = 0.15 and the option expires in 180 days. What is the call option price?

  Find the current share price

If the required return is 12 percent and the company just paid a $2.50 dividend. what is the current share price?

  What was the times interest earned ratio

Assuming a 35 percent income tax rate, what was the times interest earned ratio? (Round your answer to 2 decimal places (e.g., 32.16).)

  What is the monthly patient volume needed

If a new technologist aide is hired, what is the monthly patient volume needed at the original reimbursement rate to cover variable costs, but not profit?.

  Calculate necessary funds

Suppose your younger sister will start college in next 5-years. She has just informed your parents that she wants to go to Harvard University, which will cost $18,000 each year for four years.

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