1. The accompanying Excel file provides you with monthly price and dividend data for CVS Caremark (Ticker symbol: CVS) from Yahoo Finance. (If you want to see where the data came from, go to Yahoo Finance. Type in the ticker, CVS. Then, click historical prices.)

2. Expand the spreadsheet and compute monthly HPRs for each of the 24 months using the HPR formula

Make sure to include the dividends.
3. Calculate arithmetic and geometric mean monthly HPRs for CVS.

4. Continue to expand the spreadsheet to calculate the standard deviation of the monthly HPRs .

5. Calculate the annualized version of your answers from parts 3 and 4. Your answers should be the annualized versions of only the final answers of parts 3 and 4, not annualized versions of each monthly HPR.
Note:
You may notice the use a divisor of n-1 for calculation of variance and standard deviation instead of n. In statistics, this is appropriate if we have a sample of returns rather than the entire population of returns. While this difference is not a big deal if you have over 30 observations, it can make a difference if you have a modest number of monthly returns to work with. Use the divisor of n-1 for this exercise.

You are considering an investment in Bank of America (BAC, NYSE).
From your analysis, you believe this stock should be valued so as to produce a 9.5 percent long-term rate of return.
Using the current stock price, determine the value of the stock using
a. The ten-year historical dividend growth rate
b. The consensus a

Stock C has a beta of 1.2, while Stock D has a beta of 1.6. Assume that the stock market is efficient. Which of the following statements is most correct?
a. The required rates of return of the two stocks should be the same.
b. The expected rates of return of the two stocks should be the same.
c. Each stock should have a r

Green's preferred stock is selling for $35 in the market and pays a $4 annual dividend.
a. What is the expected rate of return on the stock?
b. If an investor's required rate of return is 10 percent, what is the value of the stock for that investor?
c. Should the investor acquire the stock?

Using the following information on Bear Corporation and the dividend discount model, calculate the value of Bear Corporation's stock.
Growth: 12% ROE: 15%
Earnings Per Share Last Year: $10.00 Beta: 1.50
Risk Free Rate: 5.00% Market Risk Premium: 6.00%

Select four stocks from finance.yahoo.com, google.finance.com, or moneycentral.msn.com. One should be a clothing manufacturer, one should be a retailer, one should be an automobile manufacturer, and one should be a restaurant or food producer.
1. Obtain the closing price, the change in price from the previous day, and the be

Woidtke Manufacturing's stock currently sells for $20 a share. The stock just paid a dividend of $1.00 a share (i.e, D0 = $1.00). The dividend is expected to grow at a constant rate of 10% a year. What stock price is expected 1 year from now? What is the required rate of return on the company's stock?

You have estimated the following probability distributions of expected future returns for Stock X and Y:
Stock X Probability Return Stock Y Probability Return
0.1 -10% 0.2 2%
0.2 10% 0.2 7

You own a portfolio of two stocks (X and Y), with 40% of the portfolio invested in Stock X. You have observed over many years that the variance of your portfolio value is 0.0144 and that the correlation between the stock X and stock Y is 0.7. If the standard deviation of Stock X is 0.20, what is the standard deviation of the sto

A firm has $1,000,000 in its common stock account and $2,500,00 in its paid-in-capital account. The firm issued 100,000 shares of common stock. What was the original issue price if only one stock issue has ever been sold? a)$35 per share, b)$25 per share, c)$10 per share, d) not enough info