Consider the historical data given in the accompanying table. a. Calculate the t
ID: 2744863 • Letter: C
Question
Consider the historical data given in the accompanying table.
a. Calculate the total return (in dollars) for each year.
b. Indicate the level of return you would expect in 2012 and in 2013.
c. Comment on your forecast.
Market Value (Price)
Year Income Beginning Ending
2007 $1.00 $30.00 $32.50
2008 1.20 32.50 35.00
2009 1.30 35.00 33.00
2010 1.60 33.00 40.00
2011 1.75 40.00 45.00
Explanation / Answer
Total return (in dollars) for each year =
b) Level of return =
Year Income Total return = Income + Dividend income(Ending price - Beginning price) Total return 2007 1 32.5-30+1 3.5 2008 1.2 35-32.5+1.2 3.7 2009 1.3 33-35+1.3 -0.7 2010 1.6 40-33+1.6 8.6 2011 1.75 45-40+1.75 6.75