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Question 1 Over the last five years, a stock has returned 15%, 13%, -20%, 12%,...

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Finance

Question 1

Over the last five years, a stock has returned 15%, 13%, -20%, 12%, and 2%. Estimate its expected return using the statistical estimator seen in our video. Give your answer in decimal form with three decimals (i.e. 5% is 0.050).

Question 2

Let's say you buy a bond at a price of 1000EUR. In one year you sell it at a price of 1000EUR. If it has paid a coupon payment of 50EUR at the end of the year, what is your total return realized? Be sure to answer in decimal form with two decimals (i.e. 2% is 0.02).

Question 3

Let's say you buy a bond at 100USD. In one year, it is trading at 120USD, but the level of prices in the economy has increased by 5%. What is your real (i.e. inflation-adjusted) return? Be sure to answer in decimal form with three decimals (i.e. 5% is 0.050).

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