Question

In: Finance

You started your investment with an opening deposit of $1,000.  Your portfolio grew as follows: Beg Year...

  1. You started your investment with an opening deposit of $1,000.  Your portfolio grew as follows:

Beg Year 1

Beg Year 2

Beg Year 3

Beg Year 4

Beg Year 5

EndYear 5

$1,000

$1,074

$1,201

$1,109

$1,175

$1,214

  1. What was your average return?  (Arithmetic average)
  2. What was your actual return? (Geometric average)
  3. Use the TVOM to calculate the Rate (R) using the End year 5 as your Future Value.  

PLEASE SHOW HOW THIS IS DONE IN EXCEL

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -


Related Solutions

You started your investment with an opening deposit of $1,000. Your portfolio grew as follows: Beg...
You started your investment with an opening deposit of $1,000. Your portfolio grew as follows: Beg Yr 1 Beg Yr 2 Beg Yr 3 Beg Yr 4 Beg Yr 5 Beg Yr 6 Beg Yr 7 Beg Yr 8 Beg Yr 9 Beg Yr 10 End Yr 10 $1,000 $1,268 $1,426 $1,497 $1,579 $995 $1,258 $1,447 $1,478 $1,714 $2,270 Calculate the average return and geometric return for each year. What is the arithmetic average of your returns? What is your...
You started your investment with an opening deposit of $1,000.  Your portfolio grew as follows: Beg Yr...
You started your investment with an opening deposit of $1,000.  Your portfolio grew as follows: Beg Yr 1 Beg Yr 2 Beg Yr 3 Beg Yr 4 Beg Yr 5 Beg Yr 6 Beg Yr 7 Beg Yr 8 Beg Yr 9 Beg Yr 10 End Yr 10 $1,000 $1,268 $1,426 $1,497 $1,579 $995 $1,258 $1,447 $1,478 $1,714 $2,270 Calculate the average return and geometric return for eachyear.   What is the arithmetic average of your returns? What is your long-term geometric...
You make a $1,000 deposit to an investment account today. The investment earns 5% p.a compounding...
You make a $1,000 deposit to an investment account today. The investment earns 5% p.a compounding monthly for the first 12 months, then it earns 10%p.a compounding monthly for the next 3 years. At the end of the 4 years the balance in the account is (to the nearest whole dollar; don't use $ sign or commas)
in one year, you will make an initial deposit in the amount of $1,000 in a...
in one year, you will make an initial deposit in the amount of $1,000 in a new savings account. You plan to make additional deposits in the same amount of $1,000 for 19 years after the initial deposit. There will only be these 20 deposits and no withdrawals made to your account. Assume the interest rate you will earn is 5% per year. How much will your account be worth in 20 years?
You want to buy a corporate bond for your portfolio. The bond is 10 year, $1,000...
You want to buy a corporate bond for your portfolio. The bond is 10 year, $1,000 par value and makes semi-annual coupon payments. The annual coupon rate is 6%. It has been four years since it was issued. Market interest rates have dropped to 4%. (10 pt.s) What is the price the bond would currently be trading at? Five years after issue the company has run into trouble and its bonds are now trading at 97. What is the yield...
You plan to deposit $1,000 in Year 1, $1,200 in Year 2 and $2,000 in year...
You plan to deposit $1,000 in Year 1, $1,200 in Year 2 and $2,000 in year 4 in your savings account. You think that you can earn 6% per year. How much will you have in your account in Year 6? Yr0    Yr1     Yr2     Yr3     Yr4     Yr 5   Yr 6         $1,000 $1,200            $2,000              ? Bank X promises to pay you $5,200 per year for 8 years, whereas Bank Y offers to pay you $7,300 per year for 5 years....
1.) You plan to deposit $1,000 in Year 1, $1,200 in Year 2 and $2,000 in...
1.) You plan to deposit $1,000 in Year 1, $1,200 in Year 2 and $2,000 in year 4 in your savings account. You think that you can earn 6% per year. How much will you have in your account in Year 6? 2.) Bank X promises to pay you $5,200 per year for 8 years, whereas Bank Y offers to pay you $7,300 per year for 5 years. a) Which of these cash flow streams has the higher present value...
If the rrr = 25% and you deposit $1,000 into your bank account, how much of...
If the rrr = 25% and you deposit $1,000 into your bank account, how much of it will banks have to set aside in their required reserve account (RR)? __________ How much will be left over to place into excess reserves (ER)? __________. Now, once ER changes, how much money can ultimately be created by our banking system? (5 points) Suppose the Fed sets the required reserve ratio at 20% and there are no excess reserves at the time (ER...
You deposit $1,000 in a saving account at 10% compounded annually. How much is your first...
You deposit $1,000 in a saving account at 10% compounded annually. How much is your first year interest? How much is your second year interest? 100, 100 100, 110 100, 120 100, 150
Suppose you are an investment analyst, your supervisor, a portfolio manager asked you to write a...
Suppose you are an investment analyst, your supervisor, a portfolio manager asked you to write a brief report on how will the COVID-19 outbreak affect the stock market and economy in the world and Malaysia, and the report must include detailed analysis from part (1) to part (3) below. Perform a fundamental analysis of the overall market and economy in Malaysia. How will COVID-19 outbreaks across the world affect the Malaysian economy in terms of economic growth rate in 2021?...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT