Over a 30-year period an asset had an arithmetic return of 12 per cent and a geometric

Question:

Over a 30-year period an asset had an arithmetic return of 12 per cent and a geometric return of 10 per cent. 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:

Related Book For book-img-for-question

Corporate Finance

ISBN: 9780077173630

3rd Edition

Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe

See More Books

Question Posted: Feb 22, 2024 03:01 AM

See More Questions

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...
Over a 40-year period an asset had an arithmetic return of 15.3 percent and a geometric return of 11.9 percent. Using Blumes formula, what is your best estimate of the future annual returns over 5...
3. Complete all parts. Let f(x) = I 2+1 on the interval [0, 2). = x 2+1 (a) Explain why the function f(x) on interval [0,2] satisfies the Mean Value Theorem. (b) find all numbers c that satisfy the...
Health care in the US has been traditionally a mixture of not-for-profit and for-profit organizations. Do you think that markets where more for-profit firms exist would be inherently more...
Use the eighteen rules of inference to derive the conclusions of the following symbolized arguments. Do not use either conditional proof or indirect proof.
We generated Figure 2.16 by first computing the mean values for each column and then pivoting the values into a single column of mean values. Replicate the data generation steps and use the...
Franciscos mass-produces folding chairs in Mexico. All direct materials are added at the beginning of production, and conversion costs are incurred evenly throughout production. The following...
Why does it later rise? How would you describe that in economic terms again?
An equity has had returns of 10 per cent, 15 per cent, 20 per cent, 12 per cent, 2 per cent, and 5 per cent over the last 6 years. What are its arithmetic and geometric returns?
Refer back to Table 9.3. What range of risk premiums would you expect to see 68 per cent of the time for Europe? What about 95 per cent of the time? Table 9.3 Worldwide Risk Premiums Relative to...
Calculate the change in entropy when 50 k] of energy is transferred reversibly and isothermally as heat to a large block of copper at (a) OC, (b) 70e
why you assume value of Machine A is assumed to decrease by $7,000 each year for the purpose of these calculations?
Jan 4 Paid $500.00 rent for the month to Eastwood Mall Inc. Issued cheque #131. Jan 4 Manager advised the rent has increased to $520.00 on new lease. Reverse and correct the previous entry to the...
Explain the benefits of utilizing sensitivity analysis and justify why those benefits are important to the decision making process.
Discuss and explain investment analysis. Provide an example for a conservative investment and a high risk investment.
How does Sage 300 2017 help provide a complete audit trail? What are the limits on entering new session dates? On entering transaction dates? Name and describethe two services that are part of the...
Retirement of Bonds Payable on the Statement of Cash FlowsIndirect Method Redstone Inc. has the following debt outstanding on December 31, 2010: 10% bonds payable, due 12/31/14 $500,000 Discount on...
Using the information in P11-2B, compute the overhead controllable variance and the overhead volume variance. Data From Problem 11-2B: Huang Company uses a standard cost accounting system to account...
Look back at the calculation for Coca-Cola and Reebok in Section 8.1. Recalculate the expected portfolio return and standard deviation for different values of x 1 and x 2 , assuming the correlation...
Mark Harrywitz proposes to invest in two shares, X and Y. He expects a return of 12 percent from X and 8 percent from Y. The standard deviation of returns is 8 percent for X and 5 percent for Y. The...
M. Grandet has invested 60 percent of his money in share A and the remainder in share B. He assesses their prospects as follows: a. What are the expected return and standard deviation of returns on...
6. Suppose someone takes out a home improvement loan for $30,000. The annual interest on the loan is 6% compounded monthly. The monthly payment is $600. Let a, denote the amount owed at the end of...
The basic efficient market hypothesis theorizes that the market cannot be beaten because it incorporates all important determining information into current share prices. Therefore, stocks trade at...
Discuss Shell scripts, if-case constructs and loops in Unix/Linux systems.? What is the case statement in Linux shell script?

Over a 30-year period an asset had an arithmetic return of 12 per cent and a geometric

Question:

Step by Step Answer:

Corporate Finance

Students also viewed these Business questions