Reference no: EM13495413
1.The last four years of returns for a stock are as follows:
a. What is the average annual return?
b. What is the variance of the stock’s returns?
c. What is the standard deviation of the stock’s returns?
2.Assume that historical returns and future returns are independently and identically distributed and drawn from the same distribution.
a. Calculate the 95% confidence intervals for the expected annual return of four different investments included in Tables 10.3 and 10.4 (the dates are inclusive, so the time period spans 83 years).
b. Assume that the values in Tables 10.3 and 10.4 are the true expected return and volatility (i.e., estimated without error) and that these returns are normally distributed. For each investment, calculate the probability that an investor will not lose more than 5% in the next year? (Hint: you can use the function normdist(x,mean,volatility,1) in Excel to compute the probability that a normally distributed variable with a given mean and volatility will fall below x.)
c. Do all the probabilities you calculated in part (b) make sense? If so, explain. If not, can you identify the reason?
3.Consider an investment with the following returns over four years:
a. What is the compound annual growth rate (CAGR) for this investment over the four years?
b. What is the average annual return of the investment over the four years?
c. Which is a better measure of the investment’s past performance?
d. If the investment’s returns are independent and identically distributed, which is a better measure of the investment’s expected return next year?
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Explain the cathode in the electrolysis of molten alcl3
: What is the initial product at the cathode in the electrolysis of molten AlCl3. A) Al (s) B) Cl2 (g) C) AlCl2 (s) D) Al3+ (aq) E) Cl? (aq)
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How the solution will change if following information change
: Brazilia Bus Tours has incurred the following bus maintenance costs during the recent tourist season. (The realis Brazil's national monetary unit. On the day of this exercise was written, the realwas equivalent in value to .5092 U.S. dollar.)
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How large is the current in the heart
: The body contains many small currents caused by the motion of ions in the organs and cells. how large is the current in the heart
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Explain which group 5 oxide dissolves in water
: Which group 5 oxide dissolves in water to give the most basic solution. A) As4O10 B) P2O5 C) N2O5 D) P2O3 E) Bi4O6
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Which is a better measure of the investment
: Calculate the 95% confidence intervals for the expected annual return of four different investments included in Tables 10.3 and 10.4 (the dates are inclusive, so the time period spans 83 years).
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Evaluate the ph at the following volumes of added acid
: A 50.0-mL solution of 0.031 9 M benzylamine was titrated with 0.050 0 M HCl. Calculate the pH at the following volumes of added acid: Va = 0, 12.0, 30.0,0.5 Ve, Ve, and 35.0 mL.
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Explain natural gas is a mixture of many substances
: Natural gas is a mixture of many substances, primarily CH4, C2H6, C3H8, and C4H10. Assuming that the total pressure of gases is 1.48atm and that their mole ration is 94:4, 0:1, 5:0.50, calculate the partial pressure in atmospheres of each gas.
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Explain ammonium nitrate can decompose explosively
: Ammonium nitrate can decompose explosively when heated according to the equation: 2NH4NO3(s)-------2N2(g) + 4H2O(g) + O2(g) How many liters of gas would be formed at 4500C and 1.00 atm pressure by explosion of 450g of NH4NO3?
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Explain which sample contains more molecules
: Which sample contains more molecules, 3.14 L of Ar at 85.00C and 1111 mm Hg pressure or 11.07g of Cl2?
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