Answer to the Question -1

We know,

HPR= Ending Value of Investment / Beginning Value of Investment

= (100*39) + (100*1.5)/ (100*34)
= (3900+150)/3400
= $1.19

HPR= $1.19

We know,

HPY= HPR -1
= 1.19 – 1
= 0.19/ 19%

HPY= $19%

Answer to the Question -2

We know,

HPR= Ending Value of Investment / Beginning Value of Investment

= (100*65) + (100*3)/ (100*61)
= (6500+300)/6100
= $0.95

HPR= $0.95

We know,

HPY= HPR -1
= 0.95 – 1
= -0.05/ -5%

HPY= $-5%
 Answer to the Question -3
$4000 used to purchase 80 shares= $50 per share
HPE= {(59*80) + (5*80)/4000
= (4720+400)/ 4000
= 5120/4000
= 1.280
HPY= HPR -1
= 1.280-1
= 0.280/ 28%

Therefore,
HPY (Total) = HPY (Price increase) + HPY (Dividend)
.280 =.180+ HPY (Dividend)
HPY (Dividends)= .10 (Ans.)

Answer to the Question -5 (a)

∑ 𝐻𝑃𝑌
Arithmetic Mean (Stock T) = 𝑁

∑{.19+0.08+(−.12)+(−0.03)+0.15}
= 5

=0.054/5.4%

∑ 𝐻𝑃𝑌
Arithmetic Mean (Stock B) =
𝑁

∑{.08+0.3+(−0.09)+0.02+0.04}
= 5

=0.016/ 1.6%

Stock T is more desirable.

 Answer to the Question -5 (b)

Variance of Stock (T)

(19%−5.4%)2+(8%−5.4%)2+(−12%−5.4%)2+(−3%−5.4%)2+(15%−5.4%)2
= 4

0.02+6.76+0.03+7.05+9.21
= 4

=5.76

Variance of Stock (B)

= ((8% − 1.6%)2 + (3% − 1.6%)2 + (−9% − 1.6%)2 + (2% − 1.6%)2 +

(4% − 1.6%)2 )/4
4.1+1.9−0.01+1.6+5.8
= 4

=3.34

Standard Deviation of T= √5.76

=2.4

Standard Deviation of B= √3.34

=1.82

Answer to the Question -5 (c)

The Coefficient of variations Stock (T)

2.4
= 0.054

=44.44

The Coefficient of variations Stock (B)

1.82
= 0.016

=113.75
 Answer to the Question -5 (d)

Geometric mean of stock (T)

5
=√{1 + .19 + 1 + 0.08 + 1 + (−.12) + 1 + (−0.03) + 1 + 0.15} -1
5
=√5.27 -1

=10.47

Geometric mean of stock (B)

5
=√{1 + 0.08 + 1 + 0.03 + 1 + (−.09) + 1 + (0.02) + 1 + 0.04} -1
5
=√5.08 -1

=1.25