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Starting from a balance of $10,000 in year 0 in a stock brokerage account, your net rates of returns are 50% in year 1, and
Starting from a balance of $10,000 in year 0 in a stock brokerage account, your net rates of returns are 50% in year 1, and -40% in year 2.
(a) How much do you have by year 2?
(b) What's the expected annual rate of return if you continue in year 3?
(c) What's the standard deviation of your returns?
(d) In the past two years, how much on average do you gain or lose on an annual basis?
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