a. Calculate the average annual total return (geometric mean) for this index for this 10-year period. Interpret your result. b. What was the cumulative wealth on December 31, 2009, per dollar invested on January 1, 2000? c. What was the cumulative wealth on December 31, 2002, per dollar invested on January 1, 2000? d Given a $100 inunot CODE00

Q: Suppose a firm has had the following historic sales figures. Year: 2016 2017 2018 2019 2020…

A: $2,215,000Explanation:The Exponential Triple Smoothing (ETS) method is used by the FORECAST.ETS…

Q: A company's annual profits have a trend line given by Y = 20,000t – 10,000, where Y is the trend and…

A: In this question future value or expected profit is to be find out given the equation.

Q: Your business manager forwards the following information to you. Your businesses earned a real rate…

A: Real rate of return = 0.076 or 7.6% Inflation rate = 0.096 or 9.6% Nominal rate of return = ?…

Q: Your business manager forwards the following information to you. Your businesses earned a real rate…

A: To calculate the nominal rate of return we will use the below formula   Nominal rate of return =…

Q: 1)   What amount invested each year at 3% annually will grow to $200,000 at the end of 25 years?…

A: Future value = $200,000 Interest = 3% Time =25 years So, amount invested each year = Using excel PMT…

Q: 10. Which of the following 1-year investments has the highest rate of return? (a) $12,500 that…

A:

Q: The following is a linear trend fitted to a series expressed in logs. = log(Tₜ) 3.9711 +0.038t where…

A: The growth rate is given as 0.038 in the logarithmic form. To convert this to a percentage growth…

Q: A person invested $6O00 in stock the market. The economy was bulling and return was 9% on average…

A: The amount of investment done in the stock market is risky sometime more returns and some time less…

Q: Ten annual returns are listed in the following table: (Click on the following icon in order to copy…

A: We invest in different types of financial securities like equities, bonds etc. We make the…

Q: Calculate the future worth (in year 11) of the following income and expenses, if the interest rate…

A: Computation of net amount:

Q: d $100M in an investment whose annual standard deviation is 0.2. Compute the 1% VaR of this position…

A: VaR is value at risk of the company that has arisen due to volatility of the investment.

Q: You have found the following historical information for DEF Company: Stock Price Year1 Year 2 EPS…

A: calculating year by year P/E ratios

Q: If that 55% return on investment (ROI) occurs over a decade, r = .55 and n = 10, so the annualized…

A: Return on investment is defined as the return generated by investment as a percentage of investment.…

Q: Brangus cattle Comapny $13 Time 1 2 9 3 14 4 23 5 25 (Click on the icon in order to copy its…

A: The measurement of the central value of a given data is known as the average. It can be identified…

Q: An investment has had returns of 15 percent, 10 percent, -16 percent, and 27 percent over the last…

A: Year Return 1 15% 2 10% 3 -16% 4 27%

Q: Year-to-date, Yum Brands had earned a 4.90 percent return. During the same time period, Raytheon…

A: portfolio return = sum of (weight of company * return of company)

Q: Please calculate the Sharpe measure for the S&P 500 over the last ten years if the standard…

A: Sharpe Ratio or Sharpe measure of a security = Return in excess of risk free rate / Standard…

Q: A stock investment generated the following annual (total) returns over these 3 years: • 2015: 20% •…

A: The geometric average return is a method of calculating the average rate of return on an investment…

Q: Given the possible returns (dividend plus capital gains) over the coming year from a $10,000…

A: Expected return =P1 r1+P2 r2+P3r3 P is probability and r is return  Expected return =-1000 ×…

Q: Ten annual returns are listed in the following table: (Click on the following icon in order to copy…

A: Arithmetic average is simple average and can be obtained by adding and dividing by the total number.

Q: Using the data shown in the table​ below that contains historical monthly prices and dividends​…

A: The average monthly return of an investment is a measure that indicates the average rate of return…

Q: You have found the following historical information for DEF Company: Year 2 Year 3 Year 4 Year1…

A: First, PE ratio for each year is calculated as Price divided by earnings. Then the average of 4 year…

Q: Daniel invested $1,000 in large U.S. stocks at the beginning of 2012. This investment earned 15.30…

A: Return rate in 2012 = 15.30% Return rate in 2013 = 33.20% Return rate in 2014 = 12.25% Return rate…

Q: Year-to-date, Yum Brands had earned a 3.90 percent return. During the same time period, Raytheon…

A: Calculation of Portfolio Return:The portfolio return is 2.58%.Excel Spreadsheet:

Q: On January 1, 2020, Martha invested $3,500. During 2020, Martha's investment earned 7%, and…

A: Here,Nominal Interest Rate earned is 7%Inflation Rate is 4%

Q: Year-to-date, Oracle had earned a -1.44 percent return. During the same time period, Valero Energy…

A: Portfolio return  = ( Weight 1 * Return 1) + ( weight 2 * Return 2) +...(weight n * Return n)

Q: Suppose you bought a stock for $45 on January 1st.  Thirty days later you received a dividend of…

A: Purchase Price = p = $45Number of days = n = 30Dividend = d = $2.2Selling Price = s = $44.30

Q: Net sales revenue, net income, and common stockholders' equity for Solomon Mission Corporation, a…

A: The trend percentage helps to compare the current year data with the previous year data or any other…

Q: Over the past 4 years an investment returned 22%, -5%, -20%, and 9%. What is the standard deviation…

A: Standard Deviation is the deviation of statistical data from its mean. It is the square root of…

Q: A​ company's stock price rose ​2.8% in​ 2011, and in​ 2012, it increased  79.7​%. a. Compute the…

A: The mean refers to the average value of the complete data where the data can be the stock returns.…

Q: Q2. (8 points) Five annual returns are listed in Year 1 -20% 2 3 17% 18% 4 -30% 5 40% If you…

A: The annual return is the return on an investment generated over a year and calculated as a…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.