Use the data given to calculate annual returns for Stock A, Stock B, and the Mar

Question

Use the data given to calculate annual returns for Stock A, Stock B, and the Market Index, and then calculate average annual returns for the two stocks and the index.

(Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and then dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the rate of return for 2011 because you do not have 2010 data.)

Please provide all formulas and data in Excel format.

Explanation / Answer

Stock A Capital Gains = (Closing of current year- Closing of previous year/closing of previous year Dividend Dividend Yield= Dividend/Previous year Close Total Returns = Capital Gains + Dividend Yield Market Index Market Return =Closing of current year- Closing of previous year/closing of previous year 2016 25.88 12.87% 1.73 7.54% 20.41% 17.09 28.79% 2015 22.93 -7.35% 1.59 6.42% -0.93% 13.27 2.00% 2014 24.75 53.44% 1.5 9.30% 62.74% 13.01 30.62% 2013 16.13 -6.00% 1.43 8.33% 2.33% 9.96 18.57% 2012 17.16 50.00% 1.35 11.80% 61.80% 8.4 19.15% 2011 11.44 1.28 7.05 Average Annual Return of A 29.27% AverageReturn of 19.83% Average of Total Returns Market Index Stock B Capital Gains = (Closing of current year- Closing of previous year/closing of previous year Dividend Dividend Yield= Dividend/Previous year Close Total Returns = Capital Gains + Dividend Yield 2016 73.13 -6.78% 4.5 5.74% -1.05% 2015 78.45 7.27% 4.35 5.95% 13.22% 2014 73.13 -14.85% 4.13 4.81% -10.04% 2013 85.88 -4.58% 3.75 4.17% -0.41% 2012 90 4.25% 3.38 3.92% 8.17% 2011 86.33 3 Average Annual Return of B 1.98% Average of Total Returns

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.