Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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

Fundamentals Of Financial Management

Authors: Eugene F. Brigham, Joel F. Houston

16th Edition

0357517571, 978-0357517574

More Books

Students also viewed these Finance questions