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Consider the rate of return of stocks ABC and XYZ. Consider the rate of return of stocks ABC and XYZ. TTT Year 20% 28% 11
Consider the rate of return of stocks ABC and XYZ.
Consider the rate of return of stocks ABC and XYZ. TTT Year 20% 28% 11 16 19 4 6- a. Calculate the arithmetic average return on these stocks over the sample period. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Arithmetic Average ABC XYZ b. Which stock has greater dispersion around the mean return? O ABC XYZ O c. Calculate the geometric average returns of each stock. What do you conclude? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Geometric Average ABC XYZ d. If you were equally likely to earn a return of 20%, 8%, 16%, 4%, or 2%, in each year (these are the five annual returns for stock ABC), what would be your expected rate of return? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected rate of returnStep by Step Solution
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