Equity are calculated as arithmetic returns

Assignment Help Financial Management
Reference no: EM132014576

Five years of realized returns for FF are given in the following table Remember:

1) While FF was stared 40 years ago, its common stock has been publicly traded for the past 25 years

2) The returns on its equity are calculated as arithmetic returns

3) The historical returns for FF for 2012 to 2015 are

                         2012          2013           2014        2015        2016

Stock return    25%             17%            30%           42%        13%

1) given the preceding data, the average realized return on FF's stock is_________ ( 25.4%, 78.74%, 50.80%, 63.5%

1b) The preceding data series represents __________( a sample, the universe, the population) of FF's historical returns. Based on this conclusion, the standard deviation of FF's historical returns is ______ (10.21%, 11.42%, 8.79%, 15.41%)

1c) if investors expect the average realized return from 2012 to 2016 on FF's stock to continue into the future, its coefficient of variation (CV) will be ________(.45   , .5   ,   .38 , .83)

Reference no: EM132014576

Reviews

Write a Review

 

Financial Management Questions & Answers

  How key stakeholders may affect the implementation stage

Consider the brief description of Target’s stakeholder relationships and combine that information with your experience shopping in a Target store. How might Target’s stakeholders (in particular, employees, customers, local communities, and suppliers)..

  What is assessment as to firms degree of economic exposure

What is your assessment as to the firm's degree of economic exposure? Assume that the RUD and the BTD move in tandem against the US$.

  Npv and irr of the proposed investment in the plane

Calculate the NPV and IRR of the proposed investment in the plane.

  Project requires an initial cash investment

The Inventive Co. is considering a new project. This project requires an initial cash investment of $75,000. The project will generate cash inflows of $24,000 in the first year. Then, the project will do nothing for two years, after which time cash i..

  Consider the calculation of an external rate of return

Consider the calculation of an external rate of return (ERR). The positive cash flows in the cash flow profile are moved forward to t = n using what value of i in the (F/P, i, n-t) factors? A) 0 B) the unknown value of ERR (i') C) MARR D) IRR

  Comparison between asset utilization ratios

A firm's profit margin is less than its peer group's. Which of the following statements draws an INCORRECT implication from this comparison between asset utilization ratios? The difference between the historic price a firm paid and its going price am..

  Explain exactly what specific currency risk importer faces

Explain exactly what specific currency risk (transaction exposure) this importer faces. completely labeled profit/loss payoff diagram for importer’s call option

  The potential adoption of flat-rate tax structure

There are a number of taxation rate structures in use in various countries in the world. For citizens residing in the United States, a progressive tax rate structure is applicable presently. Write a report comparing the advantages and disadvantages o..

  Company cost of equity capital using arithmetic growth rates

what is your best estimate of the company’s cost of equity capital using arithmetic and geometric growth rates?

  Advantage of this situation to make riskless profit

Explain exactly how you would take advantage of this situation to make a riskless profit.

  What is the dollar-denominated return in percentage

Suppose a U.S. investor wishes to invest in a British firm currently selling for 50 pounds per share by buying 200 shares of the British firm. The current exchange rate is $1.40 per pound. After one year, the exchange rate is $1.60 per pound and the ..

  Calculate the required rate of return for mudd enterprises

Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 3.2% rate of inflation in the future.

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