Question
In: Finance
Is it possible for a stock to have positive arithmetic average rate of return but lose...
Is it possible for a stock to have positive arithmetic average rate of return but lose money overall?
• If your answer is yes, please give a concrete numerical example (e.g. first period return = .., second period return = ..., etc.).
• If your answer is no, please explain why
Solutions
jeff jeffy answered 1 year agoRelated Solutions
If possible show work (Calculating the geometric and arithmetic average rate of return) The common stock...
If possible show work
(Calculating the geometric and arithmetic average rate of
return) The common stock of the Brangus Cattle Company had the
following end-of-year stock prices over the last five years and
paid no cash dividends:
Time
Brangus cattle Comapny
1
$13
2
8
3
10
4
23
5
29
a. Calculate the annual rate of return for each year from the
above information.
b. What is the arithmetic average rate of return earned by
investing in Brangus CattleCompany's...
(Calculating the geometric and arithmetic average rate of return) The common stock of the Brangus Cattle...
(Calculating the geometric and arithmetic average rate of
return) The common stock of the Brangus Cattle Company had the
following end-of-year stock prices over the last five years and
paid no cash dividends:
Time
Brangus cattle Comapny
1
$1313
2
99
3
1111
4
2323
5
2929
a. Calculate the annual rate of return for each year from the
above information.
b. What is the arithmetic average rate of return earned by
investing in Brangus Cattle Company's stock over this...
(Calculating the geometric and arithmetic average rate of return) The common stock of the Brangus Cattle...
(Calculating the geometric and arithmetic average rate of
return) The common stock of the Brangus Cattle Company had the
following end-of-year stock prices over the last five years and
paid no cash dividends: Time Brangus cattle Comapny 1 $14 2 11 3
12 4 24 5 25 a. Calculate the annual rate of return for each year
from the above information. b. What is the arithmetic average rate
of return earned by investing in Brangus Cattle Company's stock
over this...
Calculate annual arithmetic rate of return and annual geometric rate of return of stock A and...
Calculate annual arithmetic rate of return and annual geometric
rate of return of stock A and B. Consider the data in table below,
which show the movements in price for two stocks over two
successive holding periods. Both stocks have a beginning price of
$10. Stock A rises to $40 in period 1 and then declines to $30 in
period 2. Stock B falls to $8 in period 1 and then rises to $25 in
period 2.
The average arithmetic return of the US stock market has been10%. The average annual corporate...
The average arithmetic return of the US stock market has been
10%. The average annual corporate bond return in the US has been
5%. The average 30-yr US Treasury bond return in the US has been
5%. Finally, the average annual US 1-month Treasury bill return in
the US has been 3.5%. From this information, please calculate the
equity risk premium within the US.
Given the following price and dividend information, calculate the arithmetic average return, the geometric average return,...
Given the following price and dividend information, calculate
the arithmetic average return, the geometric average return, the
sample variance and the sample standard deviation for the returns,
holding period return, the $1 invested equivalent, the probability
of losing money, the upper bound to the 95th confidence interval,
the lower bound to the 99th confidence interval, the lower bound to
the 68th confidence interval. (Enter percentages as decimals and
round to 4 decimals)
Year
Price
Dividend
0
50.72
1
43.54...
The Rate of Return for firms on the stock market is about 8% on average(the mean)...
The Rate of Return for firms on the stock market is about 8% on
average(the mean) with a standard deviation of 6%.
(A) What proportion of firms will earn a return between 5% and
10%?
(B) To the nearest percent, find the probability of a
firm earning 0% or less per year (i.e. not making money or losing
money)? If there are 1,000 firms listed on the stock market, then
how many firms will not make any money or lose...
You have the following information for Stock A and Stock B: Expected rate of return Stock...
You have the following information for Stock A and Stock B:
Expected rate of return
Stock A: .12
Stock B: .06
Standard deviation:
Stock A: .9
Stock B: .5
Correlation between the two stocks: .80
If you invest $600 and $400 in Stock A and Stock B respectively,
what is the standard deviation of the portfolio?
What's the difference between the arithmetic and geometric average return (conceptually, not mathematically), and when is...
What's the difference between the arithmetic and geometric
average return (conceptually, not mathematically), and when is it
best to use each?
Why is a stock split not positive or negative for an investor’s return on a stock?
Why is a stock split not positive or negative for an investor’s
return on a stock?
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