Calculate the average return, Financial Econometrics

The  expected  return  and  risk  involved  in  making  an  investment  are important  factors  considered  by  investors.  The  expected  return  of  a business can be influenced by many factors. Past performance is considered to reflect expected future performance and an equal probability of 25% is assumed for all returns. Based on the analysis of past returns and forecasting, the following information is available for returns on two shares

listed on the stock exchange:

Year

Mazebe

Baduna

2009

0.20

0.16

2010

0.28

0.12

2011

0.36

0.10

2012

0.12

0.18

Required:

1 Calculate the average return for each of the two shares.

2 Calculate the risk involved by use of the standard deviation of each of the two shares.

3 Calculate the co-efficient of variation of each of the two shares.

Posted Date: 4/1/2013 2:52:01 AM | Location : United States







Related Discussions:- Calculate the average return, Assignment Help, Ask Question on Calculate the average return, Get Answer, Expert's Help, Calculate the average return Discussions

Write discussion on Calculate the average return
Your posts are moderated
Related Questions
If current ratio for a company is equal to its acid test (that is, quick ratio), then: A: The current ratio must be less than one. B: Working capital is negative. C: Trade

Topic AASB 116 Property, Plant and Equipment allows entities to choose between the cost model and revaluation model for measuring and accounting for non-current assets subseq

Problem : PART A (a) Analyse Keynes's model of liquidity preference. (b) Analyse the instruments central banks use to control the supply of money in the economy. PA

Ask Sita expects her future earnings to be worth Rs. 100. If she falls ill, her expected future earning will be Rs. 25. There is a belief that she may fall ill with probability of

Intercorporate investments: DI has a 25% interest in a gold mine in the Yukon. They have held this investment for eighteen months. During this time it has not made any mon

Gabi wishes to purchase an apartment in Berea Johannesburg which is situated in a quiet street. The purchase price, including costs, is R355 000 and she wishes to obtain a 100% mor

Question 1: (a) Explain the Law of One Price and discuss its limitation in explaining exchange rates. (b) According to you, what factors determine exchange rates in the long

Q. What do you meant by Overtrading? When a company is trading large volumes of sales very quickly, it may also be generating large amounts of credit sales and consequently lar

Question Your portfolio has a beta of 1.18. The portfolio consists of 15% U.S. Treasury bills, 30% in stock A, and 55% in stock B. Stock A has a risk-level equivalent to that o

Remedies for overtrading Short-term solutions • Speeding up collection from customers. • Slowing down payment to suppliers. • Maintaining lower inventory levels. Lo