How would you interpret the meaning of holding-period return

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Reference no: EM131488248

Question: 1. (Holding-period returns) From the price data that follow, compute the holdingperiod returns for periods 2 through 4.

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2. a. (Computing holding-period returns) a. From the price data here, compute the holding-period returns for Jazman and Solomon for periods 2 through 4

b. How would you interpret the meaning of a holding-period return?

1. a. Given the holding-period returns shown here, compute the average returns and the standard deviations for the Zemin Corporation and for the market.

b. If Zemin's beta is 1.54 and the risk-free rate is 4 percent, what would be an appropriate required return for an investor owning Zemin? (Note: Because the returns of Zemin Corporation are based on monthly data, you will need to annualize the returns to make them compatible with the risk-free rate. For simplicity, you can convert from monthly to yearly returns by multiplying the average monthly returns by 12.)

c. How does Zemin's historical average return compare with the return you believe to be an appropriate, given the firm's systematic risk?

Reference no: EM131488248

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