Question
During the last 4 years, in sequence, an investment has earned annual returns of 5%, 0%, -5%, and 0%. Calculate the geometric average annual return
During the last 4 years, in sequence, an investment has earned annual returns of 5%, 0%, -5%, and 0%. Calculate the geometric average annual return and the estimated (i.e., "sample") standard deviation.
During the last 4 years, in sequence, an investment has earned annual returns of 6%, 0%, -6%, and 0%. Calculate the geometricaverage annual return and the estimatedstandard deviation.
a. | Geometric average return = -0.063%, Estimated standard deviation = 4.082% | |
b. | Geometric average return = 0.000%, Estimated standard deviation = 4.082% | |
c. | Geometric average return = 0.000%, Estimated standard deviation = 3.809% | |
d. | Geometric average return = 0.000%, Estimated standard deviation = 3.536% | |
e. | None of the other answers are correct | |
f. | Geometric average return = -0.063% Estimated standard deviation = 3.809% | |
g. | Geometric average return = -0.063%, Estimated standard deviation = 3.536% |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started