Nominal rate of return on large-company stocks

Assignment Help Financial Management
Reference no: EM13879311

The nominal rate of return on large-company stocks consists of a:

Risk-free rate of return plus an inflation adjustment.

Real risk-free rate of return plus a risk premium.

Real rate of return plus the U.S. Treasury bill rate of return.

Risk-free rate of return plus a bond premium.

Risk premium plus the U.S. Treasury bill rate of return.

Reference no: EM13879311

Questions Cloud

Why are revisions of monetary aggregates less of problem : Why are revisions of monetary aggregates less of a problem for measuring long-run movements of the money supply than they are for measuring short-run movements?
Expressions uses the economists definition of money : Which of the following three expressions uses the economists’ definition of money?
What will his annual payment be : Cal Lury owes $38,000 now. A lender will carry the debt for seven more years at 8 percent interest. That is, in this particular case, the amount owed will go up by 8 percent per year for seven years. The lender then will require that Cal pay off the ..
Based on extensive analysis of market interest rates : It is now the beginning of a year. Jared is considering the purchase of a 7 percent (coupon rate), 10-year bond that is presently priced to yield 12 percent (i.e. market interest rate is 12 percent). If his expectations are correct, what kind of real..
Nominal rate of return on large-company stocks : The nominal rate of return on large-company stocks consists of a:
Long-term certificate of deposit : You need $24,956 at the end of 10 years, and your only investment outlet is an 11 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year. What..
What is standard deviation of these returns : A stock had returns of 11 percent, -18 percent, -21 percent, 20 percent, and 34 percent over the past five years. What is the standard deviation of these returns?
Normally distributed with an average historical return : The annual returns on AAA stocks are normally distributed with an average historical return of 17.3% and a standard deviation of 33.4%. What is the probability that annual return on small-company stocks is between 10% and 30%?
Treasury bill is generally used as the measure : The market return on the U.S. Treasury bill is generally used as the measure of the:

Reviews

Write a Review

Financial Management Questions & Answers

  Begin by constructing a time line

A project has an initial cost of $56,800, expected net cash inflows of $15,000 per year for 9 years, and a cost of capital of 13%. What is the project's NPV?

  Interest rate or payment of the same type of investment

Find the value of an investment (perpetuity) that pays you $6,000 annually forever but returns no principle. Find the interest rate or payment of the same type of investment.

  Current yield with semiannual payments

A bond that matures in 10 years sells for $1,190. The bond has a face value of $1,000 and a yield to maturity of 9.7489%. The bond pays coupons semiannually. What is the bond's current yield?

  The value of any asset

The value of any asset is the ________.

  Additional taxable income-income taxes and the net income

The R&D of the Advanced Electronics, Inc. (AE) designed a product commissioned by the military, but with applications in commercial markets as well. To manufacture and market the product AE needs to build new manufacturing facilities, and will need a..

  Low interest rate on money you deposit in bank

Typically, you will receive a very low interest rate on money you deposit in a bank. Interest rates on car loans and business loans are much higher. Why, then, do most people prefer putting their money in a bank to lending it directly to individuals ..

  Find number of shares held by bidvest holdings in adcock

Calculate the total number of shares to be acquired by CFR based on Adcock's market value of R70 per share and calculate the number of shares held by Bidvest Holdings in Adcock.

  Equipment is depreciated straight-line to a zero book value

Thornley Machines is considering a 3-year project with an initial cost of $1,080,000. The project will not directly produce any sales but will reduce operating costs by $640,000 a year. The equipment is depreciated straight-line to a zero book value ..

  How many years will you make payments on the loan

You borrowed $700 at 5% compounded quarterly. Your payments are $150 at the end of each year. How many years will you make payments on the loan?

  What is the market value of kurzs existing assets

Kurz Manufacturing is currently a levered firm with 50M shares outstanding priced at $10.00 per share and 250K bonds outstanding priced at $1,000 per bond (this is also the face value of each bond).  What is the market value of Kurz’s existing assets..

  Calculate amount of interest and separately- principal paid

You plan to purchase a $175,000 house using a 15 year mortgage obtained from a local bank. The mortgage rate offered to you is 7.75%. You will make a down payment of 20% of the purchase price.  Calculate the amount of interest and, separately, princi..

  What is cost of preferred stock

Jensen's Travel Agency has 12 percent preferred stock outstanding that is currently selling for $32 a share. The market rate of return is 13 percent and the firm's tax rate is 34 percent. What is Jensen's cost of preferred stock?

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