What was the arithmetic average annual return

Assignment Help Financial Management
Reference no: EM13919399

Consider the following information on large-company stocks for a period of years. Series Arithmetic Mean Large-company stocks 13.1 % Small-company stocks 16.4 Long-term corporate bonds 6.2 Long-term government bonds 6.1 Intermediate-term government bonds 5.6 U.S. Treasury bills 3.8 Inflation 3.6 Required: (a) What was the arithmetic average annual return on large-company stocks in nominal terms? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Nominal return % (b) What was the arithmetic average annual return on large-company stocks in real terms? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Reference no: EM13919399

Questions Cloud

What is the probability that the sample mean scores : A typical adult has an average IQ score of 105 with a standard deviation of 20. If 20 randomly selected adults are given an IQ test, what is the probability that the sample mean scores will be between 85 and 125 points?
Develop a linear program that phototech can use : Develop a linear program that PhotoTech can use to determine how many units of each battery pack to produce at each plant in order to minimize the total production and shipping cost associated with the new contract.
Legal curfews or restricted driving privileges : 1. Should people under 18 be subjected to legal curfews or restricted driving privileges?
Risk-free asset-how much will you invest in stock : You have $100,000 to invest in Stock D, Stock F, or a risk-free asset. You must invest all your money. Your goal is to create a portfolio that has an expected return of 11.4 percent. Assume D has an expected return of 14.9 percent, F has an expected ..
What was the arithmetic average annual return : Consider the following information on large-company stocks for a period of years. Series Arithmetic Mean Large-company stocks 13.1 % Small-company stocks 16.4 Long-term corporate bonds 6.2 Long-term government bonds 6.1 Intermediate-term government b..
Free market systems versus a command economy : s there a difference between the free market systems versus a command economy. In your own words explain the characteristics that underline both theses' systems. Provide a country example for each system.
What is the companys cost of common equity : Koshun Company just paid a dividend of $0.90. The company's common stock currently sells at a price of $30.00 and its dividend grows at a constant rate of 7.00%. What is the company's cost of common equity (RE)?
Equity transactions affect components of stockholders equity : Briefly explain (3–5 paragraphs) how equity transactions affect the components of stockholders’ equity. For instance, what impact do these transactions have on financial ratios, such as EPS (earnings per share)?
Perform an analysis of tjs product-mix problem : Perform an analysis of TJ's product-mix problem, and prepare a report for TJ's president that summarizes your findings. Be sure to include information and analysis.

Reviews

Write a Review

Financial Management Questions & Answers

  Produces positive after-tax cash inflows

Johnson Jets is considering two mutually exclusive projects. Project A has an up-front cost of $122,000 (CF0 = -122,000), and produces positive after-tax cash inflows of $30,000 a year at the end of each of the next six years. Compute the equivalent ..

  What is the required expected return for biopharma according

Biopharma is a pharmaceutical company. Biopharma’s annual stock returns have a CAPM beta of 1.25 (i.e. β =1.25). The market portfolio’s return is 13%, and the risk free rate is 5%. a. What is the required expected return for Biopharma according to th..

  What is the present value of that annuity if discount rate

An investment will provide you with $100 at the end of each year for the next 10 years. What is the present value of that annuity if the discount rate is 8% annually? What is the present value of the above if the payments are received at the beginnin..

  What is effective interest rate being paid

A friend purchased a new sound system that was selling for $4,200. He agreed to make a down payment of $1,000 and to make 24 monthly payments of $160, beginning one month from the time of purchase. What is the effective interest rate being paid?

  Appropriate discount rate for the project

Lakonishok Equipment has an investment opportunity in Europe. The project costs €12 million and is expected to produce cash flows of €1.8 million in Year 1, €2.6 million in Year 2, and €3.5 million in Year 3.

  Determine the modified internal rate of return for project

Determine the modified internal rate of return for a project that costs $75,000 and would yield after-tax cash flows of $12,000 the first year, $14,000 the second year, $17,000 the third year, $19,000 the fourth year, -$23,000 the fifth year, and $29..

  What rate of equity growth

A nursing home projects asset growth at 10 percent per year over the next 1o years. If it wishes to reduce its reliance on debt financing, what rate of equity growth over the 10 year period will be desired? Is it.

  Dividends are expected to grow at a rate

Yang Corp. is growing quickly. Dividends are expected to grow at a rate of 31 percent for the next three years, with the growth rate falling off to a constant 6.6 percent thereafter.

  Personal tax rate for the firms investors

New Business is just being formed by 10 investors, each of whom will own 10% of the business. The firm is expected to earn $1,000,000 before taxes each year. The corporate tax rate is 34% and the personal tax rate for the firm's investors is 35%.

  What are your disbursement-collection and net floats

You have $36,400 on deposit with no outstanding checks or uncleared deposits. One day you write a check for $6,300 and then deposit a check for $4,700. What are your disbursement, collection, and net floats?

  Asset management ratios are broken into two categories

Asset Management Ratios are broken into two categories. Which of the following would be one of the categories?

  There can be a good strategy with a bad product and a good

there can be a good strategy with a bad product and a good product with a bad strategy and this can impact product or

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd