Question: Over a 48-year period an asset had an arithmetic return of 13.2 percent and a geometric return of 11.1 percent. Using Blumes formula, what is

Over a 48-year period an asset had an arithmetic return of 13.2 percent and a geometric return of 11.1 percent.

Using Blume’s formula, what is your best estimate of the future annual returns over 7 years? 13 years? 24 years? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

To estimate future annual returns using Blumes formula w... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

A small renovation of a Hard Rock CafÃ© gift shop has six activities (in hours). For the following estimates of a, m, and b calculate the expected time and the standard deviation for...

The figure shows a connection that employs three SAE grade 4 bolts. The tensile shear load on the joint is 5000 lbf. The members are cold-drawn bars of AISI 1020 steel. Find the factor of safety for...

ABC Company has the following mutually exclusive projects. If the company's payback period is 2 years, which of these projects should be chosen? Project A Year 0 -19,500 1 11,500 2 8,750 3 2,500...

Over a 48-year period an asset had an arithmetic return of 13.2 percent and a geometric return of 11.1 percent. Using Blumes formula, what is your best estimate of the future annual returns over 7...

Over a 48-year period an asset had an arithmetic return of 13.20 percent and a geometric return of 11.10 percent. Using Blume's formula, what is your best estimate of the future annual returns over 7...

Over a 48-year period an asset had an arithmetic return of 12.00 percent and a geometric return of 9.90 percent. Using Blumes formula, what is your best estimate of the future annual returns over 9...

Over a 48-year period, an asset had an arithmetic return of 12 percent and a geometric return of 9.9 percent. Using Blume's formula, what is your best estimate of the future annual returns over 9...

Over a 4 8 - year period, an asset had an arithmetic return of 1 2 percent and a geometric return of 9 . 9 percent. Using Blume s formula, what is your best estimate of the future annual returns over...

Over a 91-year period, an asset had an arithmetic return of 10.5 percent and a geometric return of 8.9 percent. What is your best estimate of the future annual returns over 25 years using Blume's...

Kraft has 1.8 billion shares, trading at $40 a share and $ 28 billion in total debt outstanding in January 2012. Over the five years of the regression, Kraft had an average market debt to equity...

Identify the type of IRA (Roth or traditional) that would be best for a taxpayer in each of the following circumstances: a. Sharon believes she will be in a higher tax bracket when she withdraws the...

Use the Chain Rule to differentiate the following function. f ( x ) equals = left parenthesis 2 x Superscript 4 Baseline plus left parenthesis 4 x minus 5 right parenthesis squared right parenthesis...

Bruno Fruscalzo decided to set up a small production facility in Sydney to sell to local restaurants that want to offer gelato on their dessert menu. To start simple, he would offer only three...

Premium Obligation The Sweet Dates Company offers to its customers a premiuma glass bowl (cost to Sweet Dates, $0.90) upon return of 40 coupons. Two coupons are placed in each box of dates sold. The...

A manufacturer of women's designer gloves has employed a team of students to redesign her manufacturing unit. They gathered the following information. The manufacturing process consists of four...

A student at the top of a building of height h throws one ball upward with a speed of vi and then throws a second ball downward with the same initial speed, vi. How do the final velocities of the...

A stone is thrown vertically upward from the roof of a building. Does the position of the stone depend on the location chosen for the origin of the coordinate system? Does the stones velocity depend...

The return of goods to the supplier will affect the purchase account. Question 27Answer True False

Suppose you are offered a project with the following payments. YEAR...............................................CASH FLOWS ($) 0......................................................$14,700...

Assume that markets are efficient. During a trading day, American Golf, Inc., announces that it has lost a contract for a large golfing project, which, prior to the news, it was widely believed to...

Aerotech, an aerospace technology research firm, announced this morning that it hired the world's most knowledgeable and prolific space researchers. Before today, Aerotech's stock had been selling...

Jimmer has contributed $15,000 to his Roth IRA and the balance inthe account is $18,000. In the current year, Jimmer withdrew $17,000 from theRoth IRA to pay for a new car. If Jimmer's marginal...

Harriet and Harry Combs (both 37 years old) are married and both want to contribute to a Roth IRA. In 2014, their AGI is $50,000. Harriet earned $46,000 and Harry earned $3,000. a. How much can...

Brooklyn has been contributing to a traditional IRA for seven years (all deductible contributions) and has a total of $30,000 in the account. In 2014, she is 39 years old and has decided that she...