MC Questions 16-23 ... Geometric Returns, Unit Values, Arithmetic Returns, and Standard Deviations

The following 8 questions refer to the follow returns for stocks for the first ten years of the century. These are total rate of returns; that is, both income and price. For example, the total rate of return for 2001 was a negative 11.85%.

If you invested $1.00 at the beginning of the time frame [1/1/2001], how much would your dollar be worth five years [5] later; that is, on 12/31/2005? Hint: Calculate your unit values.

	Total
Year	Return
2001	-11.85%
2002	3.97%
2003	28.36%
2004	10.74%
2005	6.83%
2006	15.61%
2007	8.48%
2008	-36.55%
2009	23.94%
2010	21.00%

Select one:

a. $1.30 to $1.40

b. $1.20 to $1.30

c. $1.50 to $1.60

d. More than $1.60

e. Less than $1.00

f. $1.00 to $1.10

g. $1.40 to $1.50

h. $1.10 to $1.20

How much would your initial dollar investment be worth at the end of year 10; that is, on 12/31/2010?

Select one:

a. $1.20 to $1.30

b. $1.40 to $1.50

c. $1.30 to $1.40

d. More than $1.60

e. $1.00 to $1.10

f. Less than $1.00

g. $1.10 to $1.20

h. $1.50 to $1.60