Question

What are the arithmetic and geometric average returns for a stock with annual returns of 6.2%, 12.8%, ?7.7%, and 9.4%? (3 pts) Explain why the aggregate returns are different considering each of the 4 year returns are identical?

Answer #1

Arithmetic average return=(6.2+12.8-7.7+9.4)/4=5.175%

Geometric averfage return:

that is **4.78%**

Even though the 4 year returns are identical, in arithmetic average return we are considering sum of all returns divided by number of returns, while in geometric average return we are considering product of all returns raised to a power which is equal to 1/number of returns.

Consider the following five monthly returns. The arithmetic
average monthly return over this period is 1.40% and the geometric
average monthly return over this period is 1.33%. Explain the
difference between the arithmetic average return and the geometric
average return. Are both numbers useful? If so, explain why?
3% -1% 2% 7% -4%
Choose the correct answer below.
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what you would actually make if you held the stock over this...

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returns, geometric and arithmetic averages and have some idea when
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3) How do you gain a basic understanding of returns and risk of
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higher returns have higher risk.
4) How will you be able to construct portfolios of different risk
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risky assets.

Q1) A stock earned annual returns of 5%, 10%, -7%, and 16% for
the last four years.
a) What is the arithmetic average return for the stock over the
last four years?
b) What is the standard deviation of the returns over the last
four years?
c) What is the geometric average return for the stock over the
last four years?
d) What is the holding period return for the stock over the last
four years?
e) What would have...

Using the following returns, calculate the arithmetic average
returns, the variances, and the standard deviations for X and
Y.
Returns
Year
X
Y
1
11 %
22 %
2
29
43
3
18
-7
4
-19
-21
5
20
51
Calculate the arithmetic average return for X.
Calculate the arithmetic average return for Y.
Calculate the variance for X.
Calculate the variance for Y.
...

Using the following returns, calculate the arithmetic average
returns, the variances, and the standard deviations for X and
Y.
Returns
Year
X
Y
1
6 %
23 %
2
24
44
3
13
-7
4
-14
-21
5
15
52
Calculate the arithmetic average return for X.
Calculate the arithmetic average return for Y.
Calculate the variance for X.
Calculate the variance for Y.
...

Using the following returns, calculate the arithmetic average
returns, the variances, and the standard deviations for X and
Y.
Returns
Year
X
Y
1
11 %
23 %
2
29
44
3
18
-10
4
-19
-24
5
20
52
Calculate the arithmetic average return for X.
Calculate the arithmetic average return for Y.
Calculate the variance for X.
Calculate the variance for Y.
Calculate the standard deviation...

Using the following returns, calculate the arithmetic average
returns, the variances, and the standard deviations for X and
Y.
Returns
Year X Y
1 10 % 18 %
2. 28 39
3 17 -7
4. -18 -21
5. 19 47
Calculate the arithmetic average return for X.
Calculate the arithmetic average return for Y.
Calculate the Variance for X
Calculate the variance for Y
Calculate the Standard Deviation for X
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The table below shows annual returns for stocks of companies X
and Y. Calculate the arithmetic average returns. In addition,
calculate their variances, as well as their standard
deviations.
Returns
Year
X
Y
1
7 %
22 %
2
25
43
3
14
-9
4
-15
-23
5
16
51
Requirement 1:
(a)
The arithmetic average return of company X's stock is:
(Click to
select) 7.61% 10.62% 9.40% 11.75% 11.47%
(b)
The...

The table below
shows annual returns for stocks of companies X and Y. Calculate the
arithmetic average returns. In addition, calculate their variances,
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PLEASE SHOW ALL STEPS AND I WILL RATE! THANK YOU
Returns
Year
X
Y
1
12 %
24 %
2
30
45
3
19
-10
4
-20
-24
5
21
53
Requirement 1:
(a)
The arithmetic
average return of company...

Using the following returns, calculate the arithmetic average
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Y.
Returns
Year
X
Y
1
11 %
24 %
2
29
45
3
18
-12
4
-19
-26
5
20
53
Calculate the arithmetic average return for X?
11.80% is correct
Calculate the arithmetic average return for Y?
16.80% is correct
Need help with the rest:
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