Which of the following statement regarding the arithmetic mean and geometric mean is true? a) Arithmetic...
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Which of the following statement regarding the arithmetic mean and
geometric mean is true?
a) Arithmetic...
(a) Calculate the expected returns using the Arithmetic Average and the Geometric Average respectively. (b) Which appro...
(a) Calculate the expected returns using the Arithmetic Average
and the Geometric Average respectively.
(b) Which approach is a better way to measure the performance of
portfolio? Why?
2. Suppose you are required to calculate a portfolio return using data for 2012 and 2013. Ob- servations are presented as follows. Period Return 2012 0.50 2013 - 0.50 Table 1: Statistics from the history of portfolio returns, 2012-2013
(Calculating the geometric and arithmetic average rate of return) The common stock of the Brangus Cattle...
(Calculating the geometric and arithmetic average rate of return) The common stock of the Brangus Cattle Company had the following end-of-year stock prices over the last five years and paid no cash dividends: Time Brangus cattle Comapny $15 11 24 28 a. Calculate the annual rate of return for each year from the above information b. What is the arithmetic average rate of return earned by investing in Brangus Cattle Company's stock over this period? c. What is the geometric...
Consider the following statements: Statement 1: Analysts prefer using the arithmetic mean over using the geometric...
Consider the following statements: Statement 1: Analysts prefer using the arithmetic mean over using the geometric mean to compute the historical equity market risk premium. Statement 2: Analysts prefer using the long-term government bond yield over the short-term government bond yield as the risk-free rate when computing the historical equity market risk premium. Which of the following is most likely? Select one: a. Only Statement 1 is correct. b. Only Statement 2 is correct. c. Both statements are incorrect. Which...
You have found an asset with an arithmetic average return of 13.40 percent and a geometric...
You have found an asset with an arithmetic average return of 13.40 percent and a geometric average return of 10.40 percent. Your observation period is 30 years. What is your best estimate of the return of the asset over the next 5 years? 10 years? 20 years? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
You have found an asset with an arithmetic average return of 12.80 percent and a geometric...
You have found an asset with an arithmetic average return of 12.80 percent and a geometric average return of 10.28 percent. Your observation period is 40 years. What is your best estimate of the return of the asset over the next 5 years? 10 years? 20 years? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
You have found an asset with an arithmetic average return of 14.00 percent and a geometric...
You have found an asset with an arithmetic average return of 14.00 percent and a geometric average return of 10.52 percent. Your observation period is 50 years. What is your best estimate of the return of the asset over the next 5 years? 10 years? 20 years? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Estimated Return 5 years % 10 years % 20 years %
The compound or geometric average return is always a) GREATER than or EQUAL to the arithmetic...
The compound or geometric average return is always a) GREATER than or EQUAL to the arithmetic average return. b) LESS than or EQUAL to the arithmetic average return. c) GREATER than the arithmetic average return. d) LESS than the arithmetic average return.
Calculate the arithmetic mean, the geometric mean, sample standard deviation, and correlation coefficient of the Bonds...
Calculate the arithmetic mean, the geometric mean, sample standard deviation, and correlation coefficient of the Bonds and Small Cap Stocks. To really test your skills, calculate the expected return and risk of a 30% Bond & 70% Small Cap Stock portfolio. Estimate the weights of each asset class where you think the Minimum Variance portfolio (MPV) be located on the risk & return graph.
6) Over a 25-year period an asset had an arithmetic return of 13.1 percent and a geometric return of 12.6 percent....
6) Over a 25-year period an asset had an arithmetic return of 13.1 percent and a geometric return of 12.6 percent. Using Blume's formula, what is your best estimate of the future annual returns over the next 10 years? A) 11.84 percent B) 13.04 percent C) 12.46 percent D) 11.18 percent E) 12.91 percent 6 7) Which one of the following statements is correct based on the period 1926-2016? A) The standard deviation of the annual rate of inflation was...
Over a 48-year period an asset had an arithmetic return of 13.2 percent and a geometric...
Over a 48-year period an asset had an arithmetic return of 13.2 percent and a geometric return of 11.1 percent. Using Blume’s formula, what is your best estimate of the future annual returns over 7 years? 13 years? 24 years? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
(a) Calculate the expected returns using the Arithmetic Average
and the Geometric Average respectively.
(b) Which approach is a better way to measure the performance of
portfolio? Why?
2. Suppose you are required to calculate a portfolio return using data for 2012 and 2013. Ob- servations are presented as follows. Period Return 2012 0.50 2013 - 0.50 Table 1: Statistics from the history of portfolio returns, 2012-2013
(Calculating the geometric and arithmetic average rate of return) The common stock of the Brangus Cattle Company had the following end-of-year stock prices over the last five years and paid no cash dividends: Time Brangus cattle Comapny $15 11 24 28 a. Calculate the annual rate of return for each year from the above information b. What is the arithmetic average rate of return earned by investing in Brangus Cattle Company's stock over this period? c. What is the geometric...
6) Over a 25-year period an asset had an arithmetic return of 13.1 percent and a geometric return of 12.6 percent. Using Blume's formula, what is your best estimate of the future annual returns over the next 10 years? A) 11.84 percent B) 13.04 percent C) 12.46 percent D) 11.18 percent E) 12.91 percent 6 7) Which one of the following statements is correct based on the period 1926-2016? A) The standard deviation of the annual rate of inflation was...
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