I need help in solving the following problems. Thanks! Investment Return A corpo

Question

I need help in solving the following problems. Thanks!

Investment Return A corporate bond that you own at the beginning of the year is worth $1075. During the year, it pays $65 in interest payments and ends the year valued at $1025. What was your dollar return and percent return?

Portfolio Weights An investor owns $10,000 of Adobe Systems stock, $15,000 of Dow Chemical, and $25,000 of Office Depot. What are the portfolio weights of each stock?

Portfolio Return Year to date, Yum Brands had earned a 5.80 percent return. During the same time period, Raytheon earned 7.26 percent and Coca-Cola earned 0.046. If you have a portfolio made up of 40 percent Yum Brands, 30 percent Raytheon, and 30 percent Coca-Cola, what is your portfolio return?

Average Return The past five monthly returns for PG&E are 3.17 percent, 3.88 percent, 3.77 percent, 6.47 percent, and 3.58 percent. What is the average monthly return (arithmetic average) the false return? What is the geometric average return (the true return)?

Standard Deviation The past five monthly returns for Kohl’s are 1.54 percent, 2.62 percent, 1.68 percent, 7.25 percent, and 2.56 percent. Compute the standard deviation of Kohls’ monthly returns.

Explanation / Answer

Question 1

Dollar Return= Interest Return +(Current Bond price-Initial Bond Price)=65 +1025-1075=15

percent return=(dollar return/initial bond value) *100=(15/1075)*100=1.395%

question 2

Adobe=10000

dow=15000

Office=25000

Total Portfolio Value=Adobe+Dow+Office depot=10000+15000+25000=50000

Hence Portfolio Weight of Adobe=stock value of Adobe/Total Portfolio Value=10000/50000=0.2

Portfolio Weight of Dow=stock value of Dow/Total Portfolio Value=15000/50000=0.3

Portfolio Weight of Office depot=stock value of Office depot/Total Portfolio Value=25000/50000=0.5

Question 3

Coca Cola return is given as -0.046 , in percentage terms it should be -4.6%

Question4

Question 5

Stock Return Portfolio % Yum 5.80% 40% Raytheon 7.26% 30% Coca cola -4.60% 30% Portfolio Return= sum of Individual stock returns* their respective portfolio weight 5.8*40%+7.26*30%-4.6*30%= 3.118

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