Blumes Formula Over a 30-year period an asset had an arithmetic return of 12.8 percent and a
Question:
Blume’s Formula Over a 30-year period an asset had an arithmetic return of 12.8 percent and a geometric return of 10.7 percent. Using Blume’s formula, what is your best estimate of the future annual returns over 5 years? 10 years? 20 years?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 71% (14 reviews)
To find the best forecast we apply ...View the full answer
Answered By
Branice Buyengo Ajevi
I have been teaching for the last 5 years which has strengthened my interaction with students of different level.
4.30+
1+ Reviews
10+ Question Solved
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th Edition
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
Question Posted:
Students also viewed these Corporate Finance questions
-
Over a 40-year period an asset had an arithmetic return of 11.7 percent and a geometric return of 9.6 percent. Using Blumes formula, what is your best estimate of the future annual returns over 5...
-
Over a 40-year period an asset had an arithmetic return of 10.4 percent and a geometric return of 8.8 percent. Using Blume's formula, what is your best estimate of the future annual returns over 5...
-
Over a 30-year period an asset had an arithmetic return of 11.2 percent and a geometric return of 9.7 percent. Using Blumes formula, what is your best estimate of the future annual returns over 5...
-
Determine whether the statement is true or false. If it is true, explain why. If it is false, explain why or give an example that disproves the statement.
-
A 5.76-kg rock is dropped and allowed to fall freely. Find the initial kinetic energy, the final kinetic energy, and the change in kinetic energy for (a) The first 2.00 m of fall (b) The second 2.00...
-
Smolira Golf has 10,000 shares of common stock outstanding, and the market price for a share of stock at the end of 2016 was $73. What is the price-earnings ratio? What is the price-sales ratio? What...
-
Aussie Sporting Company Pty Ltd produces two types of sporting balls: basketballs and footballs. During the year ended 30 June 2025 it sold the balls in the proportion of three basketballs for every...
-
Case Study: A manufacturing company is evaluating two options for new equipment to introduce a new product to its suite of goods. The details for each option are provided below: Option 1 $65,000 for...
-
A project requires an initial investment of $100,000 to purchase equipment. The equipment will be depreciated on a straight-line basis over the five-year life of the project. The company expects the...
-
Write a program that produces calendars as output. Your program should have a method that outputs a single months calendar like the one below, given parameters to specify how many days are in the...
-
Distributions in Problem 18, what is the probability that the return is less than100 percent (think)? What arc the implications for the distribution of returns?
-
Blumes Formula Assume that the historical return on large-company stocks is a predictor of the future returns. What return would you estimate for large-company stocks over the next year? The next 5...
-
Use the fact that 12 fluid ounces is approximately 6.89 cubic inches to find the dimensions of the 12-ounce soda can that can be constructed using the least amount of metal. Compare these dimensions...
-
Q4. You are given the following information about country A in period 0:r (interest rate paid on debt) = 5%; g (growth rate of GDP) = 9%; b (debt-to-GDP ratio) = 80%. (a) Calculate the primary...
-
How would partial bugeting look like when youre decudding whether to replace current seed with Td-away?
-
The Dashwoods have calculated their taxable income to be $88,000 for 2021, which includes $2,000 of long-term capital gains. Using the appropriate tax rate schedules, Dividends and Capital Gains Tax...
-
What does a projected income statement for maple leaf hardware ltd. look like?
-
Develop a prior year's reconstructed operating statement, assuming typically competent, professional management. Based on the reconstructed NOI and the current market value, determine the...
-
What graphs should be drawn to determine that a population is normally distributed?
-
The liquidliquid extractor in Figure 8.1 operates at 100F and a nominal pressure of 15 psia. For the feed and solvent flows shown, determine the number of equilibrium stages to extract 99.5% of the...
-
Consider the following investment strategy involving put options on a stock with the same expiration date. (i) Buy one 25-strike put (ii) Sell two 30-strike puts (iii) Buy one 35-strike put Calculate...
-
Ms. Yamisaka has determined that the average monthly return of another Mega client was 1.63 percent during the past year. What is the annualized rate of return? a. 5.13 percent b. 19.56 percent c....
-
The return calculation method most appropriate for evaluating the performance of a portfolio manager is a. Holding period b. Geometric c. Money-weighted (or dollar-weighted)
-
The rates of return on Cherry Jalopies, Inc., stock over the last five years were 17 percent, 11 percent, 2 percent, 3 percent, and 14 percent. Over the same period, the returns on Straw Construction...
-
Individual Retirement Account (IRA) Bonds Mutual fund Stocks Futures Defined contribution plans What is it? Level of Risk and Potential Return Minimum investment? Easy to start or stop?
-
1. A company purchased machinery in 2015 for $400,000. Its value in 2018 was $320,000. Assuming the resale value decreases exponentially, what will the value be in 2020? As a part of your solution,...
-
ROA of a company is 8.57%, Total assets end of the year of 2021 are $9.6 million, ROE is 14% and Profit margin of 19.9% what is the firms value of net income? and what is stockholders equity?
Study smarter with the SolutionInn App