Question

A stock has had returns of 9 percent, 10 percent, 22 percent, -12 percent, and 25...

A stock has had returns of 9 percent, 10 percent, 22 percent, -12 percent, and 25 percent over the last five years.

1, What is the geometric return for the stock?

2. What is the standard deviation of this stock?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Average return=Total return/Total time period

=(9+10+22-12+25)/5=10.8%

Return (Return-Average return)^2
9 (9-10.8)^2=3.24
10 (10-10.8)^2=0.64
22 (22-10.8)^2=125.44
-12 (-12-10.8)^2=519.84
25 (25-10.8)^2=201.64
Total=850.8%

Standard deviation=[Total (Return-Average return)^2/(Time period-1)]^(1/2)

=[850.8/(5-1)]^(1/2)

=[850.8/4]^(1/2)

=14.58%(Approx)

Geometric return=[(1+rate 1)(1+rate 2)(1+rate 3)(1+rate 4)(1+rate 5)]^(1/5)-1

=[(1+0.09)(1+0.1)(1+0.22)(1-0.12)(1+0.25)]^(1/5)-1

=9.98%(Approx).

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A stock has had returns of 8 percent, 10 percent, 20 percent, -12 percent, and 24...
A stock has had returns of 8 percent, 10 percent, 20 percent, -12 percent, and 24 percent over the last five years. Answer questions 32 - 33 What is the geometric return for the stock? What is the standard deviation of this stock?
Financial management question A stock has had returns of 6 percent, 10 percent, 21 percent, -14...
Financial management question A stock has had returns of 6 percent, 10 percent, 21 percent, -14 percent, and 25 percent over the last five years. 1. What is the geometric return for the stock? 2. What is the standard deviation of this stock?
A stock has had returns of 12 percent, 19 percent, 21 percent, 21 percent, -12 percent,...
A stock has had returns of 12 percent, 19 percent, 21 percent, 21 percent, -12 percent, 26 percent, and -5 percent over the last six years. What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places.) a.) Arithmetic return? b) Geometric return?
Question 22 You find a certain stock that had returns of 14 percent, -15 percent, 20...
Question 22 You find a certain stock that had returns of 14 percent, -15 percent, 20 percent, and -12 percent for four of the last five years. The average return of the stock over this period was 6.5 percent. What is the standard deviation of the stock's returns? Group of answer choices 15.3 percent 16.8 percent 18.7 percent 19.3 percent 20.3 percent
A stock had returns of 16 percent, 12 percent, 19 percent, 17 percent, 18 percent, and...
A stock had returns of 16 percent, 12 percent, 19 percent, 17 percent, 18 percent, and -1 percent over the last six years.    What is the arithmetic return for the stock?    What is the geometric return for the stock?
You find a certain stock that had returns of 14 percent, -11 percent, 21 percent, and...
You find a certain stock that had returns of 14 percent, -11 percent, 21 percent, and 22 percent for four of the last five years. The average return of the stock over this period was 12 percent. What was the stock's return for the missing year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places.) What is the standard deviation of the stock's returns? ( DO not round intermediate calculations and enter...
Anderson stock had returns of 6%, -22%, 18%, 12%, and -2% over the past five years....
Anderson stock had returns of 6%, -22%, 18%, 12%, and -2% over the past five years. What is the standard deviation of Anderson's returns? A. 11.68 percent B. 10.21 percent C. 18.74 percent D. 13.49 percent E. 15.52 percent
8. A stock had returns of 16.11 percent, 23.82 percent, −11.53 percent, and 9.58 percent over...
8. A stock had returns of 16.11 percent, 23.82 percent, −11.53 percent, and 9.58 percent over four of the past five years. The arithmetic average return over the five years was 13.16 percent. What was the stock return for the missing year? 9. A stock had returns of 17.59 percent, −7.11 percent, and 23.81 percent for the past three years. What is the standard deviation of the returns?
You find a certain stock that had returns of 9 percent, −16 percent, 18 percent, and...
You find a certain stock that had returns of 9 percent, −16 percent, 18 percent, and 14 percent for four of the last five years. The average return of the stock over this period was 10.3 percent. a. What was the stock’s return for the missing year? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b. What is the standard deviation of the stock’s return? (Do not round intermediate...
A stock had returns of 15 percent, 14 percent, 18 percent, 5 percent, 16 percent, and...
A stock had returns of 15 percent, 14 percent, 18 percent, 5 percent, 16 percent, and 2 percent over the last six years. What is the arithmetic return for the stock? What is the geometric return for the stock?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT