What is the geometric average return

Assignment Help Financial Management

Reference no: EM131057697

1. Hacker Corporation's stock produced returns of 15%, 26%, 7%, -13%, and 11% last five years. What is the arithmetic average return and the standard deviation of the stock's returns for the period?

2. Following Question 1, suppose the current T-bill rate is 0.2%. What is the risk premium of owing Hacker Corporation's stock?

3. Following Question 1, what range of returns would you expect to see 68% of the time?

4. Following Question 1, what is the geometric average return?

Reference no: EM131057697

Questions Cloud

What is the average dividend growth rate : Over the past five years, Westover Enterprises has paid increasing annual dividends of $.82, $.87, $.95, $1.10, and $1.12 a share. What is the average dividend growth rate?

Refurbishing one of its hotels at cost : Hathaway, Inc., a resort company, is refurbishing one of its hotels at a cost of $6,794,207. Management expects that this will lead to additional cash flows of $1,560,000 for the next six years. What is the IRR of this project? Should the Firm accepr..

Creating homemade dividends : You own 1000 shares of stock in Beal's Corporation. You will receive $.75 per-share dividend in one year. Into years, Beal's will pay a liquidating dividend of $40 per share. The required return on Beal's stock is 16%. Suppose you want only $190 tota..

Futures using the parity relationship : It is now January. The current interest rate is 5.0%. The June futures price for gold is $1493.00, while the December futures price is $1,503. Assume the June contract expires in exactly 6 months and the December contract expires in exactly 12 months..

What is the geometric average return : Hacker Corporation's stock produced returns of 15%, 26%, 7%, -13%, and 11% last five years. What is the arithmetic average return and the standard deviation of the stock's returns for the period? what is the geometric average return?

Worth immediately after your shares are purchased : You are investing $8,000 in a mutual fund that charges a 4.50 percent front-end load. The offering price is $24.70 a share. What will your investment be worth immediately after your shares are purchased?

Calculate the standard deviation of the two-asset portfolio : Assume Marvin's Section 401(k) plan balance of $10,000 is equally invested in two mutual funds. Mutual Fund A has a standard deviation of 8%, and Mutual Fund B has a standard deviation of 11%. Assume the correlation coefficient of the funds is 75%. C..

Fund charges contingent deferred sales charge : You invested $5,000 in a mutual fund 27 months ago when the NAV of the fund was $30.00. You have not acquired or sold any shares since that time. Today, the NAV is $28.40. The fund charges a contingent deferred sales charge of 6, 5, 4, 3, 2, 2, and 1..

P-E ratio remained unchanged : Kellogg Co. (K) recently earned a profit of $3.82 earnings per share and has a P/E ratio of 20.15. The dividend has been growing at a 4 percent rate over the past few years. If this growth rate continues, what would be the stock price in six years if..

User Account

All Pages