What is the geometric return

Assignment Help Financial Management
Reference no: EM13914681

A) Your stock investments return 8%, 12%, and -4% in consecutive years.

1) What is the geometric return?.

2) What is the sample standard deviation of the above returns?

3) Using the standard deviation and mean that you just calculated, and assuming a normal probability distribution, what is the probability of losing 3% or more?

Reference no: EM13914681

Questions Cloud

What is the expected inflation rate in year : Suppose two year treasury bonds yield 5%, while 1 year bonds yield 3%, risk free rate (r*) is 1% and the maturity risk premium is zero. a. Using the expectations theory, what is the yield on a 1 year bond 1 year from now? b. What is the expected infl..
Sort of planning went into developing the system : How technology is used in your organization. What types of systems do you see being used on a daily basis? Consider how these systems were developed. Who came up with the idea for the system? What sort of planning went into developing the system? ..
Radioactivity is a phenomenon of the spontaneous emission : Radioactivity is a phenomenon of the spontaneous emission of A. protons (alpha particles) B. electrons (beta particles)
Following accounts normally has a debit or credit balance : Indicate whether each of the following accounts normally has a debit or credit balance:
What is the geometric return : Your stock investments return 8%, 12%, and -4% in consecutive years. What is the geometric return?. What is the sample standard deviation of the above returns?
Test the equality of the debit and credit balances : Record the events in the general journal. Post the events to T-accounts and determine the ending account balances. Test the equality of the debit and credit balances of the T-accounts by preparing a trial balance.
Calculate the price of each of the three bonds : Bond A has a 5% annual coupon, matures in 3 years and has a $1,000 face value. Bond B has a 6% annual coupon, matures in 3 years and has a $1,000 face value. Calculate the price of each of the three bonds and indicate whether each bond is trading at ..
Formulate hypothetical economic policy motivate automobile : Do you see any problem with the implicit signals the federal government is sending to American auto manufacturers and to American car drivers through these policies? Briefly discuss.
How many bonds they need to issue : X Corporation’s outstanding bonds have a $1,000 par value, a 6% semi annual coupon, 3 years to maturity and a 8% YTM. What is the bond’s price? If X Corporation needs to raise 2 million, how many bonds they need to issue?

Reviews

Write a Review

Financial Management Questions & Answers

  What was the average annual rate of change in the price

20 years ago, the average home sale price in your hometown was $75,351. Today the average price is $244,329. What was the average annual rate of change in the price over this time period? Round the answer to two decimal places in percent form. Show w..

  What are the net operating cash flows in years

New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $840,000, and it would cost another $24,000 to install it. What is the Year-0 net cash flow? $ What are the ne..

  Point-of-time related values and period-related values

What is the difference between point-of-time related values and period-related values and what do they have in common? Give Practical examples for each.

  Cost variance and cost performance index

Cost Variance (CV) and Cost Performance Index (CPI) can both be used to determine whether a project is on budget, under budget, or over budget at a particular point in time. Why have two measures for the same thing?

  Considering a new three-year expansion project

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $3 million. The fixed asset falls into the three-year MARCS class. The project is estimated to generate $2,180,000 in annual sales, ..

  What is the profit-loss from these transactions

An investor has engaged in the following transactions on the futures market. What is the profit/loss from these transactions? What is the overall profit/loss?

  New investment that it plans to finance using one-third debt

The Walgreen Corporation is contemplating a new investment that it plans to finance using one-third debt. the firm can sell new $1000 par value bonds with a 15 year maturity at a price of $947 that carry a coupon interest rate of 12.8 percent that is..

  What would be the marginal tax rate on the extra income

Leonardo, who is married but files separately, earns $80,000 of taxable income. He also has $15,000 in city of Tulsa bonds. His wife, Theresa, earns $50,000 of taxable income. If Leonardo earned an additional $30,000 of taxable income this year, what..

  Uses centralized approach and makes most of the decisions

Both Berkley and Oakley are large public corporations with subsidiaries throughout the world. Berkley uses a centralized approach and makes most of the decisions for its subsidiaries. Oakley uses a decentralized approach and its subsidiaries make man..

  Same cost of equity and after tax cost of debt

Two companies have the same cost of equity and after tax cost of debt. What needs to be true regarding the cost of debt as compared to cost of equity for the WACC of the higher leverage firm to be higher than that of lower leverage firm? And why?

  Money market account with an annual return

You plan to deposit $1,500 per year for 6 years into a money market account with an annual return of 2%. You plan to make your first deposit one year from today. What amount will be in your account at the end of 6 years? Round your answer to the near..

  The firms cost of equity

What is the firm's cost of equity? If the following is true:

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