Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Annual stock prices are provided in the Stock Prices Table below. The variance of Ln-return for this price series is V (r) = 0.0322. Answer

Annual stock prices are provided in the Stock Prices Table below. The variance of Ln-return for this price series is V (r) = 0.0322. Answer the following questions: Wbne X X2012 ni botzovni 00.0 - w lo ingaw a) What is the historical (annualized) average Ln-Return? b) What is the historical (annualized) Geometric Return?w0081 c) What is the expected Ln-Return? e.g., what is E (r)? Jadw 1119m orth it is muten texhem sni ( d) What is the expected Geometric Return? e.g., what is E(R)?tivab bisbat tohem ril ( Important Note: the table below has annual prices not daily prices. You do not need to convert to annual values. Stock Price Table Year Price 0 100 1 125 115 145 3 rf { (MA)) laborant 1922 Tcfiqu) (Sp Hist
image text in transcribed
Annual stock prices are provided in the Stock Prices Table below. The variance of Ln-return for this price series is V(r)=0.0322. Answer the following questions: a) What is the historical (annualized) average Ln-Return? b) What is the historical (annualized) Geometric Return? c) What is the expected Ln-Return? e.g., what is E(r) ? d) What is the expected Geometric Return? e.g., what is E(R) ? Important Note: the table below has annual prices not daily prices. You do not need to convert to annual values

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Investments

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

7th Edition

007331465X, 978-0073314655

More Books

Students also viewed these Finance questions

Question

=+d) Why does the no trend model from Exercise 40 no longer work?

Answered: 1 week ago