Illustrate what is the geometric return

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Reference no: EM1314851

Q. If your stock investment returns 8percent (%), 12percent (%) also -4percent (%) in consecutive yrs, Illustrate what is the geometric return?

Illustrate what is the sample standard deviation of the above returns?

Using the standard deviation also mean which was immediately Computed also assuming a normal probability distribution, Illustrate what is the probability of losing 3percent (%) or more?

Davis Corporation has an investment policy which requires acceptable projects to recover all costs within 3 yrs. The corporation uses the discounted payback method to assess potential projects also uses a WACC of 10percent (%). The cash flows for two independent projects are

Elucidate how below:

Project A Project B
Yr Cash Flow Cash Flow
0 -$100,000 -$80,000
1 40,000 50,000
2 40,000 20,000
3 40,000 30,000
4 30,000 0

In which (if any) investment project (or projects) should the company invest?

Reference no: EM1314851

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