# Question: Consider an investment with the following returns over four years

Consider an investment with the following returns over four years:

a. What is the compound annual growth rate (CAGR) for this investment over the four years?

b. What is the average annual return of the investment over the four years?

c. Which is a better measure of the investment’s past performance?

d. If the investment’s returns are independent and identically distributed, which is a better measure of the investment’s expected return nextyear?

a. What is the compound annual growth rate (CAGR) for this investment over the four years?

b. What is the average annual return of the investment over the four years?

c. Which is a better measure of the investment’s past performance?

d. If the investment’s returns are independent and identically distributed, which is a better measure of the investment’s expected return nextyear?

## Relevant Questions

Download the spreadsheet from MyFinanceLab that contains historical monthly prices and dividends (paid at the end of the month) for Ford Motor Company stock (Ticker: F) from August 1994 to August 1998. Calculate the realized ...Consider two local banks. Bank A has 100 loans outstanding, each for $1 million, that it expects will be repaid today. Each loan has a 5% probability of default, in which case the bank is not repaid anything. The chance of ...Suppose the market risk premium is 5% and the risk-free interest rate is 4%. Using the data in Table 10.6, calculate the expected return of investing ina. Starbucks’ stock.b. Hershey’s stock.c. Autodesk’s stock.Consider an equally weighted portfolio of stocks in which each stock has a volatility of 40%, and the correlation between each pair of stocks is 20%.a. What is the volatility of the portfolio as the number of stocks becomes ...You expect HGH stock to have a 20% return next year and a 30% volatility. You have $25,000 to invest, but plan to invest a total of $50,000 in HGH, raising the additional $25,000 by shorting either KBH or LWI stock. Both KBH ...Post your question