Suppose you bought a 10 percent coupon bond one year ago for $950. The face value of the bond is $1,000

Suppose you bought a 10 percent coupon bond one year ago for $950. The face value of the bond is $1,000. The bond sells for $985 today. If the inflation rate last year was 9 percent, what was your total real rate of return on this investment?    A.  -4.88 percent B.  -5.32 percent C.  4.78 percent D.  9.78 percent E.  10.47 percent Nominal return = ($985 - $950 + $100)/$950 = 0.1421 Real return = [(1 + 0.1421)/(1 + 0.09)] - 1 = 4.78 percent

86.

Calculate the standard deviation of the following rates of return:        A.  10.79 percent B.  12.60 percent C.  13.48 percent D.  14.42 percent E.  15.08 percent Average return = (0.07 + 0.25 + 0.14 - 0.15 + 0.16)/5 = 0.094 Standard deviation = √[1/(5 - 1)] [(0.07 - 0.094)2 + (0.25 - 0.094)2 +(0.14 - 0.094)2 +(-0.15 - 0.094)2 + (0.16 - 0.094)2] = 15.08 percent

87.

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 2 percent, -12 percent, 16 percent, 22 percent, and 18 percent. What is the variance of these returns?    A.  0.02070 B.  0.01972 C.  0.01725 D.  0.01684 E.  0.02633 Average = (0.02 - 0.12 + 0.16 + 0.22 + 0.18)/5 = 0.092 Variance = [1/(5 - 1)] [(0.02 - 0.092)2 + (-0.12 - 0.092)2 + (0.16 - 0.092)2 + (0.22 - 0.092)2 + (0.18 - 0.092)2] = 0.01972