Two investments generated the following annual returns: a. What is the average annual return on each investment? Round your answers to one decimal place. The average annual rate of return on X: % -Select- 20X0 20X1 20X2 20X3 20X4 Investment X 11% 22 30 16 9 The average annual rate of return on Y: b. What is the standard deviation of the return on investments X and Y? Round your answers to two decimal places. Standard deviation of X: Standard deviation of Y: c. Based on the standard deviation, which investment was riskier? ✓was riskier. % Investment Y 22% 24 10 13 12

Two investments generated the following annual returns: a. What is the average annual return on each investment? Round your answers to one decimal place. The average annual rate of return on X: % -Select- 20X0 20X1 20X2 20X3 20X4 Investment X 11% 22 30 16 9 The average annual rate of return on Y: b. What is the standard deviation of the return on investments X and Y? Round your answers to two decimal places. Standard deviation of X: Standard deviation of Y: c. Based on the standard deviation, which investment was riskier? ✓was riskier. % Investment Y 22% 24 10 13 12

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Ten annual returns are listed in the following table: (Click on the following icon in order to copy its contents into a spreadsheet.) - 19.6% 16.2% 18.3% - 49.8% 43.7% 1.1% - 16.4% a. What is the arithmetic average return over the 10-year period? b. What is the geometric average return over the 10-year period? c. If you invested $100 at the beginning, how much would you have at the end? 46.4% a. What is the arithmetic average return over the 10-year period? The arithmetic average return over the 10-year period is %. (Round to two decimal places.) 45.3% - 3.9%
An asset has an average return of 10.73 percent and a standard deviation of 20.70 percent. What range of returns should you expect to see with a 95 percent probability? Multiple Choice −9.97% to 31.43% −51.37% to 72.83% −30.67% to 52.13% −20.32% to 41.78% −9.97% to 11.49%
If a cell in an Excel spreadsheet uses the following formula to determine the future value of an investment: =FV(0.0745/12, 12*30,-145) How much money is being invested each month? (Express your answer rounded correctly to the nearest cent!) %$4 What is the APR? (Express your answer correctly rounded to the nearest hundredth of a percent!) % If you haven't answered the question correctly in 3 attempts, you can get a hint.
Find the standard deviation for a security that has three one-year returns of -1%,8% , and 16%, respectively .
Assume that at the beginning of the year, you purchase an investment for $2,500 that pays $67 annual income. Also assume that the investment's value has decreased to $2,350 at the end of the year. a. What is the rate of return for this investment? b. Is the rate of return a positive or a negative number? Complete this question by entering your answers in the tabs below. Req 1 Req 2 What is the rate of return for this investment? Note: Enter your answer as a percent rounded to 2 decimal places. Input the amount as a positive value. Rate of return % Req 1 Req 2 >
You are comparing two investments. The first pays 3 percent interest per month, compounded monthly, and the second pays 6 percent interest per six months, compounded every six months. a. What is the effective semiannual interest rate for each investment? b. What is the effective annual interest rate for each investment? c. Based on the interest rates, which investment is preferred? Does the decision depend on whether the comparison is based on an effective six-month rate or an effective one-year rate? a. The effective semiannual interest rate for the first investment is percent. (Type an integer or decimal rounded to two decimal places as needed.)
This is a three-part question. Answer to part one is 2.4%; please help me solve for parts two and three. Thank you.
Kynan has an investment with the following annual returns for four years: • Year 1: 10% • Year 2: -3% • Year 3: 5% • Year 4: 11% What is the arithmetic average? The answer can be as a whole number or decimalKynan has an investment with the following annual returns for four years: • Year 1: 10% • Year 2: -3% • Year 3: 5% • Year 4: 11% What is the arithmetic average? The answer can be as a whole number or decimal
Here are the percentage returns on two stocks. Digital Executive Fruit Cheese 14% 4% Month January February March April May June July August 6 8 Variance Standard deviation % Digital Cheese 2 4 14 a-1. Calculate the monthly variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 1 decimal places.) -3 47.5 69X Executive Fruit 23 2 4.8 X
Over a particular period, an asset had an average return of 5.2 percent and a standard deviation of 8.5 percent. What range of returns would you expect to see 95 percent of the time for this asset?
Investor has had the following returns in the Magic Fund for the past 4 years: 15%, 25%, -30%, 18%. c) State whether the annual geometric return (assume positive) should be higher, lower, or the same as the annual arithmetic return. Neither calculation nor explanation is necessary. d) State which measure, annual arithmetic return or annual geometric return, better represents how an investment performed over time. Neither calculation nor explanation is necessary.
Compute the (a) expected return, (b) standard deviation, and (c) coefficient of variation for investments with the following probability distributions: (LO 8-2) Probability rA rB 0.3 30.0% 5.0% 0.2 10.0 15.0 0.5 - 2.0 25.0

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