Stan invested in the Great Growth mutual fund 5 years ago. His returns were 50%, -20%, 10%, 0% and 15%, respectively. What was the geometric average return over the five years? A. 7.7% B. 9.7% C. 8.7% D. 6.7%

Stan invested in the Great Growth mutual fund 5 years ago. His returns were 50%, -20%, 10%, 0% and 15%, respectively. What was the geometric average return over the five years? A. 7.7% B. 9.7% C. 8.7% D. 6.7%

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter2: Descriptive Statistics

Section: Chapter Questions

Problem 17P: Suppose that you initially invested 10,000 in the Stivers mutual fund and 5,000 in the Trippi mutual...

See similar textbooks

Related questions

Q: April Stigum will receive a 20-year annuity of $20,000 annually, beginning six years from today. In…

A: Present value is an estimate of the present value of future cash values that may be received at a…

Q: For the next fiscal year, you forecast net income of $51,900 and ending assets of $508,000. Your…

A: Obtaining money or capital to support different financial operations, investments, or initiatives is…

Q: Kayla Thompson is married and currently rents an apartment for $650 per month and paying $375…

A: To determine whether Kayla should rent or buy the townhouse, we need to calculate the total cost of…

Q: What amount should be deposited today at 4.56% compounded monthly to have $5000 in 3 years?

A: Interest Rate = 4.56%No. of years = 3Future Value (FV) = 5000

Q: Cash flow from assets Cash flow to creditors Cash flow to stockholders

A: To calculate the cash flow from assets, cash flow to creditors, and cash flow to stockholders for…

Q: 1. Suppose that the reserve ratio is 0.12 and the currency ratio is 0.3, and there are no excess…

A: To calculate the money supply in each of the scenarios mentioned, use the money multiplier…

Q: Dickinson Company has $11,820,000 million in assets. Currently half of these assets are financed…

Q: Japan Life Insurance Company invested $10,000,000 in pure-discount U.S. bonds in May 1995 when the…

A: The rate of return of an investment refers to the profits that the investment provides to the…

Q: Performance a sensitivity analysis on the relationship between future value at the end of year 10…

A: Here,Deposit is $1,000Time Period is 10 yearsWe can determine the future value of an amount manually…

Q: uppose that Tap Dance, Incorporated's capital structure features 60 percent equity, 40 percent debt,…

A: Weighted average cost of capital (WACC) is the average cost of capital. It can be calculated by…

Q: Next year's free cash flows for a target firm are expected to be $1,835,000, with constant growth of…

A: Common stock value will be the present value of all future earnings less debt and preferred stock

Q: d Martha are twins, and just graduated from college. They plan to retire in 40 years. To that end,…

A: In order to answer the question, we must see the amount per month invested and for the period of…

Q: Consider a future value of $2,000, 7 years in the future. Assume that the nominal interest rate is…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and…

A: Cash Flow for Year 1 = cf1 = $250,000Cash Flow for Year 2 = cf2 = $20,000Cash Flow for Year 3 = cf3…

Q: Shamrock Inc. is considering modernizing its production facility by investing in new equipment and…

A: The rate of return refers to the profit earned over an investment made by the investors. It is…

Q: 4. Say you are trying to value QAN shares as of 30 December 2022. The closing QAN price for this day…

A: Valuation of the stock can be done through the cumulating of the present value of all cash flows or…

Q: 5 years ago Mayra began depositing money into a bank account every quarter that earns 6% compounded…

A: When interest on interest is calculated and accumulated it is called compounding.

Q: Red Sun Rising Corporation has just signed a lease for its new manufacturing facility. The lease…

A: Present value is a capital budgeting technqiue. which help in knowign the present value of future…

Q: Given the NYSE advancing/declining (Num) and volume (Vol) Day 1 2 3 4 5 Advancing Declining Num Vol…

A: The Arms Index, also known as the Trading Index (TRIN), is a technical analysis indicator used in…

Q: tep 1: Find the discount rate: Following industry practice when apply the CAPM model; we will use…

A: Required rate of the stock can be found by using CAPM equation based on risk of the stock as given…

Q: Floyd's corporation has $20,000 in current liabilities and $27,000 in current assets. Its initial…

A: Current ratio is the ratio of current assets and current liabilties and it shows the working capital…

Q: You are evaluating two different silicon wafer milling machines. The Techron I costs $258,000, has a…

A: Equivalent Annual cost (EAC) is the total cost incurred by the company annually for operating and…

Q: Bausch Company is presented with the following two mutually exclusive projects. The required return…

A: NPV represents the value generated by a project in relation to absolute profitability.IRR represents…

Q: Here is a table from Canaccord's 'sum of the parts' valuation of InterCare. InterCare is one of the…

A: Working capital is a fundamental financial metric that represents a company's ability to cover its…

Q: Write down the formulae for the return and expected return from time t = 0 and t = T on (a) a…

A: A leveraged purchase involves buying a stock with borrowed funds, while a short position involves…

Q: 5. The costs for postage and packaging are examples of what type of expense?

A: The costs for postage and packaging are examples of "operating expenses" or "operating costs"."

Q: Interest Rates Nominal rate Periodic rate Effective annual rate 8.80% 2.20%- 9.09%- Rahul needs a…

A: Variables in the question:Nominal rate=8%No.of compounding= Bi-monthly ( every 2 months)No. of…

Q: Mr. James K. Silber, an avid international investor, just sold a share of Néstle, a Swiss firm, for…

A: Forward Market:It is the marketplace where financial instruments are offered at an advance price for…

Q: Doug Bernard specializes in cross-rate arbitrage. He notices the following quotes: Swiss…

A: Arbitrage is a situation where an investor takes advantage of differences in exchange rates in…

Q: 1. You have just obtained a commercial mortgage for $6.25M with a 5-year term, 25-year amortization…

A: We are required to calculate an amortization table, therefore, we have to use excel and the excel…

Q: You are scheduled to receive $45,000 in two years. When you receive it, you will invest it for 8…

A: Amount After 3 Years = a = $45,000Time = t = 8 YearsInterest Rate = r = 6%

Q: Malaysian Island Resort. Theresa Nunn is planning a 30-day vacation on Pulau Penang, Malaysia, one…

A: The exchange rate is a variable that compares one currency's worthiness to another. It is measured…

Q: The principal P is borrowed and the loan's future value A at time t is given. Determine the loan's…

A: In a simple interest rate , the interest is not compounded.In Simple interest,Future value (A) =…

Q: Dawgpound Incorporated has a bond trading on the secondary market that will mature in four years.…

A: The price of a bond is equal to the sum of the present value of coupon payments till the maturity…

Q: Future value of an annuity Using the values below, answer the questions that follow. (Click on the…

A: Odinary annuity is where payment is due at end of period and annuity due is where payment is due at…

Q: What is the duration of a 2-year $1.000 par value bond with a 10% coupon paid semiannually and an 8%…

A: A bond is a kind of debt security issued by the government and private companies to the public for…

Q: Annual payment # of years Rate Output area: a) PV of ordinary annuity PV of annuity due b) FV of…

A: Annual Payment = pmt = $14,500Time = nper = 5Interest Rate = rate = 7.1%

Q: a. What price would you expect to pay for the Kenny Corporation bond? Note: Do not round…

A: Bonds are corporate debt units that are issued by firms and securitized as tradable assets. Bonds…

Q: 5. Calculating Average Returns (LO1, CFA1) The rates of return on Cherry Jalopies, Inc., stock over…

A: Let's first calculate the arithmetic average return for each stock using the provided data.Cherry…

Q: You will deposit $5,000 today. It will grow for 9 years at 12% interest compounded semiannually. You…

A: A regular, periodic contribution of money or funds that is made once a year, often on an annual…

Q: ou annually invest $2,000 in an individual retirement account (IRA) starting at the age of 30 and…

A: Since, in this question fixed amount is invested each year. So, it is the question of annuity.…

Q: Required information [The following information applies to the questions displayed below.] Ike…

A: Bonds refer to instruments issued by companies to raise debt capital from non-traditional sources.…

Q: Consider the cash flow transactions depicted in the accompanying cas diagram, with the changing…

A: Present value is the equivalent value today based on the time value of the money and the interest…

Q: A 6% Transocean bond with annual coupon payments and a $1,000 par value has 12 years to maturity. If…

A: The present value of a bond is the discounted value of the future interest payment and discounted…

Q: You have to visit the website of one investment dealer or mutual fund dealer who has NAAF. Please…

A: Aligning more closely with IIROC and MFDA's comprehensive standards will not only ensure regulatory…

Q: A BBB-rated corporate bond has a yield to maturity of 10.5%. A U.S. Treasury security has a yield to…

A: Bonds refer to instruments issued by companies to raise debt capital from investors and other…

Q: Present value of an annuity) Determine the present value of an ordinary annuity of $2,000 per year…

A: We need to use present value of ordinary annuity formula to calculate present value of annuity at…

Q: Which of the following statements are NOT problems a typical large investor faces? In order to…

A: Large investors, often referred to as institutional investors, have a profound influence on global…

Q: Boseman Department Store is considering the purchase of a new machine at a cost of $22,802. The…

A: IRR is also known as Internal rate of Return. It is a capital budgeting technique which helps in…

Q: You are considering an annuity which costs $100,000 today. The annuity pays $8,000 a year at an…

A: An annuity refers to a stream of cash flows occurring regularly at fixed periodic intervals. For…

Question

Stan invested in the Great Growth mutual fund 5 years ago. His returns were 50%, -20%, 10%, 0% and 15%, respectively. What was the geometric average return over the five years?

A. 7.7%
B. 9.7%
C. 8.7%
D. 6.7%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Background

VIEW

Step 2: computation of geomatric return

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

John began his investing program with a $5,500 initial investment. The table below recaps his returns each year as well as the amounts he added to his investment account. What is his dollar-weighted average return? Time 0 1 2 3 4 A) 1.5 percent B) 2.2 percent C) 2.0 percent D) 1.8 percent E) 2.6 percent Investment $ 5,500 $ 2,000 $ 2,600 $ 3,000 $ 900 Return 8.5 % 5.0 % 4.5% 9.0 % 2.5%
Suppose that at the beginning of Year 1 you invested $10,000 in the Stivers mutual fund and $5,000 in the Trippi mutual fund. The value of each investment at the end of each subsequent year is provided in the table below. Year Stivers Trippi Mean annual return (to 3 decimals) Which mutual fund performed better? $15,000 $16,100 $17,000 $18,000 Compute the mean annual return for the Stivers mutual fund and for the Trippi mutual fund. Do not round intermediate calculations. Stivers Trippi The Trippi mutual fund V ✔ 7.847 % 9.977 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 % $10,500 $11,900 $12,900 $13,900 Hint(s) $5,700 $6,300 $7,000 $7,600 $8,600 $9,200 $9,900 $10,600 Check
Suppose that at the beginning of Year 1 you invested $10,000 in the Stivers mutual fund and $5,000 in the Trippi mutual fund. The value of each investment at the end of each subsequent year is provided in the table below. Mean annual return (to 3 decimals) % Year Year 1 $10,700 Year 2 $11,900 Year 3 $12,900 Year 4 $13,900 Year 5 $15,000 Year 6 $16,000 Year 7 $17,100 Year 8 $18,100 Compute the mean annual return for the Stivers mutual fund and for the Trippi mutual fund. Do not round intermediate calculations. Stivers Trippi % Stivers Trippi $5,600 $6,400 $7,000 $7,600 $8,600 $9,300 $9,900 $10,700
Suppose you invest $5,000 into a mutual fund that is expected to earn a rate of return of 7%. The amount of money you will have in 10 years is closest to which of the following? The amount you will have in 25Lyears is closest to which of the following? O 1) $53,500; $802,500 O 2) $2,552.56; $3,257.79 O 3) $9,835.76; $27,137.16 O 4) $3,138; $ 1,311,892 5) None of the answers are correct
Suppose that at the beginning of Year 1 you invested $10,000 in the Stivers mutual fund and $5000 in the Trippi mutual fund. The value of each investment at the end of each subsequent year is provided in the table below. Which mutual fund performed better? Please show steps in Excel Year Stivers Trippi 1 11,000 5,600 2 12,000 6,300 3 13,000 6,900 4 14,000 7,600 5 15,000 8,500 6 16,000 9,200 7 17,000 9,900 8 18,000 10,600
Peter invested his $100 in bond B with a 10% interest after some years. In less than 2 years, he have $1150 in his account. With a positive outlook, he added another $100 on his account. What best describe his $1150? a. Future Value b. Dividend c. Present Value d. Earnings
Suppose that at the beginning of Year 1 you invested $10,000 in the Stivers mutual fund and $5,000 in the Trippi mutual fund. The value of each investment at the end of each subsequent year is provided in the table below. Mean annual return (to 3 decimals) 7.847 Which mutual fund performed better? The Trippi mutual fund % 9.977 Year Year 1 Year 2 Year 3 $12,900 Year 4 $13,900 Year 5 $15,000 Year 6 $16,100 Year 7 $17,000 Year 8 $18,000 Compute the mean annual return for the Stivers mutual fund and for the Trippi mutual fund. Do not round intermediate calculations. Stivers Trippi % Stivers $10,500 $11,900 Trippi $5,700 $6,300 $7,000 $7,600 $8,600 $9,200 $9,900 $10,600
Suppose you invest $3200 in a mutual fund. Over 5 years, your investment grows in value to $8500. What is your total return? State your answer as a percentage rounded to 1 decimal place. [Only give the numerical answer. Do not enter a percentage sign (%) in the answer box] ◆ Previous hp Not saved Submit Our
Suppose you invest $4600 in a mutual fund. Over 9 years, your investment grows in value to $9800. What is your annual return? State your answer as a percentage rounded to 1 decimal place. [Only give the numerical answer. Do not enter a percentage sign (%) in the answer box.] • Previous hp Not saved g
You invested $10,000 in a mutual fund. What was your percentage return if your dollar return was $500? 1% 50% 5% 10%
Consider that Adjovi Hevi placed GHS 12,525 in Mutual Fund for the next 15 years. She is to earn a quarterly interest rate of 11.25% per year. a. Compute her Future value using i. Simple interest rate ii. Compound interest rate iii. Explain the difference in your results
About a year ago, Eric Robertson bought some shares in the Diamond Mountain Mutual Fund. He bought the fund at $25.50 a share, and it now trades at $26.30. Last year, the fund paid dividends of $0.72 a share and had capital gains distributions of $2.50 a share. Assume that the mutual fund distributed the dividends and capital gains at the end of the year. Using the approximate yield formula, what rate of return did Eric earn on his investment? Round the answer to two decimal places. % Repeat the calculation using a handheld financial calculator. Round the answer to two decimal places. % What rate of return would he have earned if the stock had risen to $30 a share? Round the answer to two decimal places. %