Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 1: David has in his investment portfolio ANZ share that paid him the rate of returns of 10 %, -13%, 12%, 7% and 15%

image text in transcribed

Question 1: David has in his investment portfolio ANZ share that paid him the rate of returns of 10 %, -13%, 12%, 7% and 15% over the past five years. Required: a) Calculate the arithmetic average return of the portfolio and geometric average return of the portfolio. Explain why arithmetic average return is not good to reflect the actual return of this asset? b) If David bought 150 ANZ shares for $1500 five years ago, the current market price of the share is $85 each and the share has paid a dividend of $10/share each year since then, what is capital gain and dividend yield of this share

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

Step: 3

blur-text-image

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

International Financial Management

Authors: Cheol Eun, Bruce Resnick

7th Edition

0077861604, 9780077861605

More Books

Students also viewed these Finance questions