Scribd
Upload
22 views1 page

BHMH2132 2122 S1 Tutorial - Lec 1 - Q

Uploaded by

Tsun Ho Po
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
22 views1 page

BHMH2132 2122 S1 Tutorial - Lec 1 - Q

Uploaded by

Tsun Ho Po
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 1

BHMH2132, Semester 1, 2021/22

Tutorial - Lecture 1
Ch 1 – A brief History of Risk and Return

Q1. For the last three years, the returns for Acme Corporation common stock have been -7.84%,
13.56%, and 18.25%.

a. Compute the geometric average return.


b. Compute the arithmetic average return.

Q2. The bank offers you the following 3-year saving plans. Which one will you choose if you
reinvest all interests to the next periods?
Option 1: An account that pays 2.5% for every six months
Option 2: An account that pays 7.5% for every 18 months
Option 3: An account that pays 0.5% for every month

Q3. Suppose you invest $100 in a bank account. Five years later, it has grown to $134.39.

a. What APR did you receive if the interest was compounded semiannually?
b. What APR did you receive if the interest was compounded monthly?

Q4. The last four years of returns of a stock are as follows:

Year 1 2 3 4
Returns -4% +28% +12% +4%

Calculate the average annual return and standard deviation of the stock’s return.

Q5. Suppose you made 10% gain in investing AAPL.US. Calculate the APR and EAR if the
investment period is (a) 1 month; (b) 5 months; (c) 15 months; (d) 40 days; (e) 400 days.

Q6. You borrow $10,000 from bank to purchase Apple Stock. The interest rate is 6% p.a.,
compounding semi-annually. How much do you repay to bank if you sell the stock (a) 3
months later; (b) 8 months later.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy