You are given the returns for the following three stocks: Calculate the arithmetic return, geometric return, and
Question:
Calculate the arithmetic return, geometric return, and standard deviation for each stock. Do you notice anything about the relationship between an asset's arithmetic return, standard deviation, and geometric return? Do you think this relationship will alwayshold?
Transcribed Image Text:
Stock C -20% 41 18 13 Stock B Stock A 12% 12 12 12 12 Year 7% 17 16
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 75% (8 reviews)
Stock A RA 012 012 012 012 0125 1200 or 1200 Var 1412 122 12 122 12 122 12 122 12 122 0000000 Stan...View the full answer
Answered By
Munibah Munir
I've done MS specialization in finance’s have command on accounting and financial management. Forecasting and Financial Statement Analysis is basic field of my specialization. On many firms I have done real base projects in financial management field special forecasting. I have served more than 500 Clients for more than 800 business projects, and I have got a very high repute in providing highly professional and quality services.I have capability of performing extra-ordinarily well in limited time and at reasonable fee. My clients are guaranteed full satisfaction and I make things easy for them. I am capable of handling complex issues in the mentioned areas and never let my clients down.
4.60+
467+ Reviews
648+ Question Solved
Related Book For
Fundamentals of Investments Valuation and Management
ISBN: 978-0077283292
5th edition
Authors: Bradford D. Jordan, Thomas W. Miller
Question Posted:
Students also viewed these Corporate Finance questions
-
You are given the following payoff table (in units of thousands of dollars) for a decision analysis problem: (a) According to Bayes decision rule, which alternative should be chosen? (b) Find EVPI....
-
Calculate the marginal propensity to consume. You are given the information in the table about the economy of the United Kingdom. Disposable Consumption income expenditure (billions of pounds per...
-
Calculate the marginal propensity to save. You are given the information in the table about the economy of Australia. Disposable Saving income (billions of dollars per year) 100 200 300 400 20 45 70...
-
Draw structures for the following molecules (a) Acrylonitrile, C3H3N, which contains a carbon-carbon double bond and a carbon-nitrogen triple bond (b) Ethyl methyl ether, C3H8O, which contains an...
-
Refer to Figure 1. Find the equation of the tangent plane to z = -10((xy( at (1, -1). Recall: d(x(/dx = (x( / x for x ( 0.
-
What barriers might the principal encounter when seeking to enact student voice initiatives that are student-led and student-centered?
-
P19-1B Healthy Foods produces canned chicken la king-chicken, mushrooms, and bell peppers in a cream sauce. The production process starts with raw chicken that workers debone. Cream sauce is...
-
ANALYSIS OF PROFITABILITY Based on the financial statement data in Exercise 24-1B, compute the following profitability measures for 20-2 (round all calculations to two decimal places): (a) Profit...
-
If the pre-money valuation of a company was $8 million and an investor is interested in investing $1 million. How much equity would the investor own in the company after the round of funding?
-
Consider two Italian restaurants located in identical towns 200 miles apart. The restaurants are identical in every respect but their tipping policies. At one, there is a flat $15 service charge, but...
-
A stock has had the following year-end prices and dividends: What are the arithmetic and geometric returns for thestock? Price $77.50 92.68 98.58 82.20 97.15 110.19 Year Dividend 0.64 0.72 0.80 1.20...
-
The 1980s was a good decade for investors in S&P 500 stocks. To find out how good, construct a spreadsheet that calculates the arithmetic average return, variance, and standard deviation for the S&P...
-
Name five components of the audit report.
-
Show how you would go about balancing the following equations: Cu + HNO3 Cu(NO3)2 + NO + H2O HIO3 + Fel2 + HCI FeCl3 + ICI + H2O 2.Conservation of mass A student places 0.58 g of iron and 1.600 g...
-
Sales MOSS COMPANY Income Statement For Year Ended December 31, 2021 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Income before taxes Income taxes...
-
Prior to the Covid-19 epidemic, Master's and Ph.D. programs in psychology required applying students to submit their scores on the standardized graduate admission exam (GRE). For the past three...
-
Benicio wants to make sure that the Sales table does not contain any duplicate records, which would make any sales analysis incorrect. Identify and remove duplicate records in the Sales table as...
-
University Car Wash purchased new soap dispensing equipment that cost $261,000 including installation. The company estimates that the equipment will have a residual value of $27,000. University Car...
-
The controller should be a member of the top management staff. Do you agree or disagree with this statement? Explain. LO1
-
The 2017 financial statements of the U.S. government are available at: https://www.fiscal.treasury.gov/fsreports/rpt/finrep/fr/fr_index.htm Use these to answer the following questions: a. Statement...
-
Calculate the price elasticity for a $1 change in price at initial price level $300 for the demand function Qd = 1,500 1.5 P .
-
Rework Problems 1 and 2 assuming that you buy 500 shares of the stock and the ending share price is $34.
-
The rate of return on Cherry Jalopies, Inc., stock over the last five years was 17 percent, 11 percent, 22 percent, 3 percent, and 14 percent. Over the same period, the return on Straw Construction...
-
Using the information from the previous problem, calculate the variances and the standard deviations for Cherry and Straw. In Problem 5 The rate of return on Cherry Jalopies, Inc., stock over the...
-
Portfolio return and beta Personal Finance Problem Jamie Peters invested $ 1 1 3 , 0 0 0 to set up the following portfolio one year ago: a . Calculate the portfolio beta on the basis of the original...
-
. Emerson Cammack wishes to purchase an annuity contract that will pay him $7,000 a year for the rest of his life. The Philo Life Insurance Company figures that his life expectancy is 20 years, based...
-
Integrity Inc. can sell 20-year, $1,000 par value bonds paying semi-annual interests with a 10% coupon. The bonds can be sold for $1,050 each; flotation cost of $50 per bond will be incurred in this...
Study smarter with the SolutionInn App