The following table gives the value of the Dow Jones Industrial Average (DJIA), NASDAQ, and the S P 500 on the first day of trading for the years 2010 through 2013 a For each stock index, compute the rate of return from 2010 to 2011, from 2011 to 2012, and from 2012 to 2013 b Calculate the geometri...

a Year DJIA NASDAQ SP 500 2010 1058396 230842 113299 2011 1167075 269152 ...

The following table gives the value of the Dow Jones Industrial Average (DJIA), NASDAQ, and the S&P

Question:

The following table gives the value of the Dow Jones Industrial Average (DJIA), NASDAQ, and the S&P 500 on the first day of trading for the years 2010 through 2013.

Year DJIA NASDAQ 2308.42 2691.52 2648.72 S&P 500 2010 2011 2012 10,583.96 11,670.75 12,397.38 13,412.55 1132.99 1271.87

a. For each stock index, compute the rate of return from 2010 to 2011, from 2011 to 2012, and from 2012 to 2013.
b. Calculate the geometric mean rate of return for each stock index for the period from 2010 to 2013.
c. Suppose that an investment of $100,000 is made in 2010 and that the portfolio performs with returns equal to those of the DJIA. What is the investment worth in 2013?
d. Repeat part c for the NASDAQ and the S&P 500.

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...

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