HW #5 Autograder: Financial Econ Basics

Enter your answers and click “Check” for each question. When you’re done, download a completion PDF.

Score: 0 / 12
1) Simple monthly return as a percentage
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2) Include dividends. Simple monthly return as a percentage
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3) Simple vs log returns

Compute the simple monthly return and the log monthly return.

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%
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Both parts must be correct to earn credit for Question 3.

4) Compounding across time

Compute the ending value after two months and the total two-month return.

$

Enter the number only (no symbol).

%
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Both parts must be correct to earn credit for Question 4.

5) Average monthly return (arithmetic mean)
%
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6) Geometric mean (growth rate)

a) Starting from $100, what is your ending value ($100 × 1.5 × 0.5$)?
b) What is the two-month total return?
c) What is the arithmetic average monthly return?

$
%
%
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All parts must be correct to earn credit for Question 6.

7) Stock’s excess return
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8) Price vs value (present value intuition)
$
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9) Law of one price (no-arbitrage logic)

a) What should their price be today?
b) If Asset A sells for $92 and Asset B sells for $95, which one is underpriced?

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Both parts must be correct to earn credit for Question 9.

10) What should the stock's price today be?
$
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11) What is the portfolio return?
%
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12) Market-adjusted abnormal return
%
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Enter numbers only inside the boxes (symbols are shown to the right).