Annual rate of return for stock

Assignment Help Business Management
Reference no: EM131034951

1. During the last five years, you owned two stocks that had the following annual rates of returns:

Year

Stock T

Stock B

1

019

0.08

2

0.08

0.03

3

-.12

-0.09

4

-0.03

0.02

5

015

0.04

(a) Compute the arithmetic mean annual return for each stock. Which stock is most desirable according to this measure?

(b) Compute the standard deviation of the annual rate of return for each stock. Which stock is most desirable according to this measure?

(c) Compute the coefficient for variation for each stock. Which stock ismost desirable according to this measure?

(d) Compute the geometric mean rate of return for each stock. Discuss thedifference between the arithmetic mean return and the geometric mean return foreach stock. How do these differences seem to be related to the standard deviationof each stock?

2. You are considering acquiring shares of common stocks in the Madison Beer Corporation.

Possible rate of return

probability

-0.10

0.30

0.00

0.10

0.10

0.30

0.25

0.30

Compute the expected return on your investment in Madison Beer

Reference no: EM131034951

Questions Cloud

Muckraking journalists in the context of the progressive : The California Politics textbook mentions “muckraking journalists” in the context of the “Progressive” era in California politics. Since this course includes the impact of media on the political process in general and California politics in particula..
When interest rates are artificially lowered : When interest rates are artificially lowered through expansionary monetary policy
Discusses the qualifications and roles of expert : Discusses the qualifications and roles of expert witnesses in the litigation process - Explain any special rules that govern the rights and duties of an expert witness versus an ordinary witness.
The management pursue as their overriding goal : The share price has declined $2 per share in last 9 months but firm profits are rising. The company has a profit-sharing plan under which all managers are partially compensated on the basis of firm profits. What should the management pursue as their ..
Annual rate of return for stock : (a) Compute the arithmetic mean annual return for each stock. Which stock is most desirable according to this measure? (b) Compute the standard deviation of the annual rate of return for each stock. Which stock is most desirable according to this m..
Interpreting managerial reports-analysis of product cost : Interpreting Managerial Reports: Analysis of Product Cost Road Tire Corporation makes several lines of automobile and truck tires. The company operates in a competitive marketplace, so it relies heavily on cost data from its FIFO-based process costin..
Fraud case where an expert witness was involved : Identify and summarize a fraud case where an expert witness was involved - Do not duplicate other students'' articles.
Do you agree or disagree with cimpean assertion : Dewey rejects the Christian purpose for schooling, which is to serve and love God. When evaluated from a Christian perspective, Dewey's progressivism falls short due to its refusal to promote the Christian ideal of serving and loving God. Dewey's ..
Determine the maximum height h in meters : Determine the maximum height h in meters to which the girl can walk up the slide without supporting herself by the rails or by her left leg.The coefficient of static friction between the girl's shoes and the slide is µS=0.8

Reviews

Write a Review

 

Business Management Questions & Answers

  Explain what assignment of jobs gives the minimum

Explain What assignment of jobs gives the minimum total time and This is a Transportation Problem of Linear Programming

  Direction for starting my sequential skill set

Direction for starting my Sequential Skill Set, for a fictional cosmetics company for men as well as women. I want a start in making up my Target Market as well as Customer Profile.

  Explain bmw''s sales slipped during the worldwide recession

Explain BMW's sales slipped during the worldwide recession in 2008 and 2009. Is its subdivision strategy too selective

  Organizational structure and control a breakdownan

organizational structure and control a breakdown.an organizations structure includes the jobs the employees hold within

  Question related to management

Devil's advocacy can be a safeguard against costly mistakes. However, it can also hamper decision making. How can devil's advocacy be used constructively in business situations?

  Show traditional guiding coalition approach

Show Traditional Guiding Coalition approach and what are the strengths and weaknesses of each?

  Management-cultural and generational differences

Management: Cultural and Generational Differences - why is it important to ensure generational differences are appropriately handled

  Illustrate what have been the financial characteristics

Has Adidas' business line up exhibited good resource fit between 1998 and 2007? Illustrate what have been the financial characteristics of its major business segments during that time period? Which businesses might have been considered cash hogs a..

  Trust building in teams

Prepare a clear vision-A leader's responsibility is to ensure a team is on the same wavelength. Confusion is often eliminated if everyone within the team has a clear objective of what is expected.

  What are the factors affecting the intensity of rivalry

What are the factors affecting the intensity of rivalry in the industry in which your company is competing? Would you characterize the rivalry and jockeying for better market position, increased sales, and market share among the companies in yo..

  Hinder the implementation of a substantial organizational c

Using Figure 5.5 as a guide, conduct a formal assessment of the power structure for your own firm or one that you are familiar with. How would this power structure help or hinder the implementation of a substantial organizational change?

  Business leadership - delegation and relationships

What are some of the possible effects if a leader fails to delegate responsibilities among other employees

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd