You invest in a stock for four years. The returns for the four years are 20%, -10%, 15%, and -5%. Calculate the arithmetic average return and the geometric average return.
Q: returns will have evened out. 6. You are a contestant on Let's Make a Deal, and have just won…
A: 6. If you are a contestant on let's make a deal and just won 1000 cash price a risk averse…
Q: A bank offers an account with an APR of 5.8% and an EAR of 5.88%. How does the bank compound…
A: APR is the annual percentage rate. It refers to the quoted rate or the nominal rate. EAR is the…
Q: This question assumes the standard mean-variance utility function. A pension scheme offers investors…
A: The choice of an investment by an investor is a function of his / her utility function, which in…
Q: Problem 5. Your company is AA-rated by a credit-rating agency, and must borrow money according to…
A: Projects should be accepted when expected return is greater than interest rate on money borrowed…
Q: The purpose of a negative pledge on the borrower's assets in an unsecured bank loan agreement is to
A: Negative pledge is included in contracts to prevent the borrower from using their assets to obtain…
Q: 1. The area of finance address the issue of the efficiency of financial market in the allocation of…
A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…
Q: You are interested in purchasing a used bass guitar at a cost of 593.57, and you want to put it on a…
A: The credit card allows an individual to make purchases on credit, i.e., purchases for which they pay…
Q: Cristina borrowed P50,000.00 from Social Security System in the form of calamity loan, with interest…
A: When a loan is taken by a person then the institution or the entity that gives the loan amortizes…
Q: Over the next year, there is a 77% chance of the market being in state 1, otherwise it is in state…
A: Covariance is a masure which helps in identifying the relationship between the movement of two asset…
Q: You are planning to invest $6,000 in an account earning 10% per year for retirement. a. If you put…
A: Solution:- When an amount is deposited somewhere, it earns interest on it. The amount initially…
Q: You are starting a new project.This project would last 4years. The following is the input…
A: Net Present Value (NPV) of this project: $58,06,203 Explanation:
Q: Determine possible applications for self-service kiosks, ATMs, and point-of-sale terminals. List ATM…
A: Given: The application in ATM is self-service kiosks, point of sale terminal. To define the ATM…
Q: California Fishing Company (CFC) is expected to pay a dividend next year of $50 per share. Future…
A: As per the Dividend growth model current price of share can be calculated as under Current Price…
Q: Suppose you receive$130 at the end of each year for the next three years. a. If the interest…
A: The PV of an asset is the value of all its cash flows today discounted at an assumed interest rate.…
Q: A house and lot can be acquired with a down payment of P500,000 and a yearly payment of P100,000.00…
A: Time Value of Money: The Time value of Money (TVM) concept asserts that the current value of money…
Q: You want to have $65,000 in your savings account 11 years from now, and you're prepared to make…
A: Solution:- When an equal amount is deposited each period at end of the period, it is called ordinary…
Q: What is the accumulated value at the end of 10 years if Php 100 is invested at a rate of 12% per…
A: Here, Present value (PV) = P100 Interest rate (RATE) = 12% Time period (NPER) = 10 years To Find:…
Q: What is the payback period at /= 0% per year? At / = 12% per year? (Note: Round your answers to the…
A: Payback period The time taken for a project to recover the initial capital that is invested is known…
Q: Consider each of the following deposit cash flow series. What will the final balance be (e.g.,…
A: Interest Rate = 10% Time Period = 5 Years
Q: Over the next year, there is a 75% chance of the market being in state 1, otherwise it is in state…
A: To Find: Expected return over the next year
Q: A firm is considering renting a trailer at $300/mo. The unit is needed for 5 yr. The leasing company…
A:
Q: The manager of a large apartment complex knows from experience that 110 units will be occupied if…
A: The manager collected 400 dollars for 110 units. But he have remain 1 dollar from the rent then To…
Q: Luke, Ashley, Casandra, Daisy, Rylie, Lucas and Ryan are helping their fellow classmate Jose search…
A: Data given: Cost of New Honda Accord = $36,250 Purchase Incentive discount =$500 College Student…
Q: Michael bought a laptop and paid P12,000 down payment plus P10,000 at the end of each month for a…
A:
Q: 3. Don Magellan borrowed today from Ginoong Lapulapu P300,000.00 and agreed to repay the loan with 4…
A: Loan amount (PV) = P300,000 Number of monthly payments (n) = 4 Interest rate = 12% Monthly interest…
Q: Mr. Cruz borrowed P50,000.00 with interest at the rate of 15% payable ar The debt will be paid,…
A: Loans are paid by the equal amount of installments that carry the payment of interest and payment of…
Q: LTD company issued ten-year bond two years ago with a coupon interest of 13% paid every six-month,…
A: To calculate the price of bond we will use the below formula Price of bond =…
Q: An investment that earns intrest: Any amount deposited does not earn interest for the first month…
A: Value in July is $2,000 To Find: Value of P
Q: Brad decides to purchase a $275,000 house. He wants to finance the entire balance. He has received…
A: Amount of Loan is $275,000 APR of 3.2% Time period of mortgage is 30 years To Find: Total interest…
Q: The yield to maturity on one-year zero-coupon bonds is 8.4%. The yield to maturity on two-year…
A: As per the given information: Yield to maturity on one-year zero-coupon bonds - 8.4%Yield to…
Q: 5. A man wishes his son to receive P200,000 ten years from now. What amount should he invest if it…
A: As per Bartleby guidelines, If multiple questions are posted, only the first 1 question will be…
Q: Using Table 19-1 and Table 19-2, calculate the annual, semiannual, quarterly, and monthly premiums…
A: As per the given information: Face value of policy - $45,000 Sex and age - Male, 50 Type of policy -…
Q: 6. Collecting of receivables and liquidation of assets concerns: Sources of funds; Uses of funds;…
A: Sources of funds are vital to keep growing your business. It is about needing funds for business…
Q: (Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation relationships) The 17-year, $1,000…
A: Time Period 17 Par Value $ 1,000.00 Coupon Rate 11% Market Price $ 855.00 Required…
Q: We have been asked to analyze our denim jeans line by price (from $24.99 to $36.99 by $1.00) and…
A: In this question first we will calculate the pairs of jeans that will be required to be sold at $…
Q: Andrew deposits $1102.32 each quarter into an annuity account for his child's college fund in order…
A: Amount Deposited = Deposit amount per quarter * 4 quarters * Number of years =1,102.32 * 4 quarters…
Q: Which of the statement is incorrect? i) Eurobond is a bond issued by an international investor and…
A: Eurobond is a bond that is issued and traded outside the host country, where the currency of the…
Q: Ningbo Industrial Concepts Incorporated Initial stock price $115.00 Exercise…
A: Stock Price is $115 Exercise Price is $115 Call Price is $4.75 Put Price is $4.50 To Find: Dollar…
Q: What would be the payback period if the store's initial investment was 25 million pesos, their…
A: Pay back period one of the method of capital budgeting and this is time required to recover the…
Q: Calculate the net asset value (in $) and number of shares purchased for the mutual fund. Round…
A: Net Asset value = (Total Asset – Total Liabilities) / no of shares outstanding Shares Purchased =…
Q: A friend asks to borrow $53 from you and in return will pay you $56 in one year. If your bank is…
A: Solution:- When an amount is deposited somewhere, it earns interest on it. The amount initially…
Q: Ms. Gold is in the widget business. She currently sells 1.4 million widgets a year at $5 each. Her…
A: EPS is the value of a company per outstanding common share. It is used to measure the profitability…
Q: year! Suppose the initial deposit is still planned to support your equal annual expenses in the next…
A: The quantum of withdrawal avaliable to support living expenses: The quantum of withdrawal available…
Q: United Snack Company sells 40-pound bags of peanuts to university dormitories for $60 a bag. The…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: 1. Do you think that financial managers should be held to a higher standard of ethical behavior?
A: Yes, absolutely financial managers should be held to a higher standard of ethical behavior.…
Q: Consider a zero-coupon bond with a face value of $60 and five years to maturity. Compute its current…
A: Given, The face value of zero-coupon bond is $60 Term to maturity is 5 years
Q: 3. Carole is paid a monthly salary of $2011.10. Her regular workweek is 35 hours. (a) What is…
A: The hourly rate of pay refers to the salary that an individual receives for every extra hour they…
Q: he risks and expected cash flows for Stock A and Stock B are the same. Indeed, these two stocks are…
A: Required rate of stock depends on the risk factors of the stock and many other factors and liquidity…
Q: Differentiate between control risk and inherent risk.
A: What is an audit risk? The term "audit risk" refers to the risk that the material financial…
Q: How much must be deposited today into an account earning 3% interest annually to support an annual…
A: Information Provided: Interest rate = 3% Annual withdrawal = $1800
You invest in a stock for four years. The returns for the four years are 20%, -10%, 15%, and -5%. Calculate the arithmetic average return and the geometric average return.
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
- You invest $10,000 in a stock and hold the stock for 3 years. Over the 3 year period, your arithmetic average return is 10% and your geometric average return is 8% per year. What is the final value of your investment?Suppose that your estimates of the possible one-year returns from investing in the common stock of the AYZ Corporation were as follows: Probability of occurrence 0.15 0.25 0.3 0.15 0.15 Possible return -10% 5% 20% 35% 50% What are the expected return? Calculate the standard deviation?Your stock portfolio earned 3%, -12%, and 3% for the last three years. What is your annualized return for the last three years on average? Enter a number with two decimal points. Answer the question in percentage terms, i.e., if your return is 10% or 0.1, enter 10.00.
- Consider an example. Assume a share of preferred stock with the following characteristics: Par value $100 Dividend rate 3.0% per year Payment schedule semiannual Maturity date You are analyzing this preferred stock for possible purchase. Your required rate of return on this stock is 5% per year, compounded semiannually. Draw a time line showing the expected dividends for this preferred stock. Calculate the value of this preferred stock based on the required rate of return. Assume that the current market price for this preferred stock is $75 per share. Calculate the expected return based on the market price. Should you invest in the stock? Why or why not? Be sure to use your results from BOTH parts B and C above. You are analyzing a share of XYZ…Compute the total and annual returns on the described investment. Four years after buying50 shares of XYZ stock for $60 per share, you sell the stock for $4,400. The total return is ??? % The anual return is ??Using 25 years of data, you estimate the arithmetic average return for a certain stock to be 5.5% and the geometric average return to be 4.6%. Using Blume's formula, what is your average forecasted return over a 5 year period?
- You buy a stock for $20. After a year the price rises to $25 but falls back to $20 at the end of the second year. What was the average percentage return and what was the true annualized return?You are interested in buying a stock today, which sells for $95 per share. You believe that the right time to sell this stock is three years later. During your investment, you expect to receive the following dividends: D1 (dividend at the end of year 1) = $4, D2 = $4.50, and D3 = $5. If you required rate of return is 11% per year, what is the expected stock price at Year 3? (Hint: Your investment horizon is three years) O $112.25 $115.00 O $113.75 $110.50 $116.25During the past five years, you owned two stocks that had the following annual rates of return: Stock B: a. Compute the arithmetic mean annual rate of return for each stock. Round your answers to one decimal place. Stock T: % Stock B: % Which stock is most desirable by this measure? -Select- is more desirable because the arithmetic mean annual rate of return is -Select- C b. Compute the standard deviation of the annual rate of return for each stock. (Use Chapter 1 Appendix if necessary.) Do not round intermediate calculations. Round your answers to three decimal places. Answer with the population standard deviation. Stock T: % By this measure, which is the preferable stock? -Select- is the preferable stock. Stock B: % Year 1 2 3 4 5 Stock T 0.16 0.05 -0.15 -0.06 0.15 By this relative measure of risk, which stock is preferable? -Select- is the preferable stock. Stock B: Stock B 0.10 0.02 -0.10 0.04 0.02 c. Compute the coefficient of variation for each stock. (Use the Chapter 1 Appendix…
- Compute the price of a share of stock that pays a 2 per year dividend and that you expect to be able to sell in one year for 25, assuming you require a 10% return.You have forecasted NICIE dividends of $5, $5.70, and $5.95 over the next three years respectively. After the end of three years the anticipated selling market price of NICIE will be $135. What is NICIE stock price provided a 7% expected rate of return?A stock has the following returns over a 3 year period: 25%, -4%, 8%. What is this stock's geometric average return over this 3 year period?