Consider the rates of the following: Year r abc as a % r xyz as a %
Fantastic news! We've Found the answer you've been seeking!
Question:
Consider the rates of the following:
Year | rabc as a %
| rxyz as a % |
|
1 | 20 | 30 |
|
2 | 12 | 12 |
|
3 | 14 | 18 |
|
4 | 3 | 0 |
|
5 | 1 | -10 |
|
- Calculate the Arithmetic average return on these stocks over the sample period.
- If you were equally likely to earn a return of 20%, 12%, 14%, 3%, or 1% in each year
(these are the five annual returns for stock ABC), what would be your expected rate
of return? - Calculate the geometric average returns of each stock (show your calculations) . What do you conclude?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: