What are the arithmetic and geometric average returns for a stock with annual returns of 15 percent, 9 percent, -7 percent, and 14 percent? Multiple Choice 11.20%; 7.75% 775%; 7.37% 7.75%; 11.20% 7.37%; 7.75% 11.20%; 7.37%

Q: Your stock's returns for the past four years are as follows.   t Return t1 19.79% t2 -0.58% t3…

A: The geometric average return is the average of the product of multiple numbers.  The terms "compound…

Q: A stock has had the following year-end prices and dividends: Year 1 2 3 4 5 6 Price $64.58 71.45…

A: Year Price (a)Dividend (b)Annual return…

Q: URC Stock Return x; X (x-X)² Year Price 30/1/2014 116.000 28/2/2014 139.000 31/3/2014 141.000…

A: The formula used is shown as follows:

Q: A stock has had the following year-end prices and dividends: Year Price Dividend 1 $ 64.23271.10…

A: Here are the arithmetic and geometric returns for the stock:YearArithmetic Return…

Q: A stock has had the following year-end prices and dividends: Year Price Dividend $ 1 43.27 23456 2…

A: Returns refer to the income earned by the investor through an investment in a particular holding…

Q: Magnesium Corporation has a policy of retaining 75% of its income. The growth rate of the company…

A: " Hi, Thanks for the Question. Since you asked multiple sub parts question, we will answer first…

Q: PREFERRED STOCK RATE OF RETURN What will be the nominal rate of return on a per- petual preferred…

A: Nominal rate of return = Dividend / Current market price Where, Dividend = Par Value * Dividend Rate…

Q: Returns on stocks X and Y are listed below: Period 1 2 3 4 5 6 7 Stock X -1% -1% 9% 9% 1% -2% 5%…

A: Here, PeriodStock XStock…

Q: Given the following information concerning three stocks, Stock Price Shares Outstanding A $10…

A: We are given the following data -Stock PriceShares OutstandingA$101,000,000 B$143,000,000…

Q: 1. 1- Calculate the beta adjusted by the degree of freedom for stock X relative to the equity market…

A: The Beta of an investment security (i.e., a stock) is a measure of its volatility of returns in…

Q: The expected rate of return and standard deviation of the global minimum variance portfolio, G, are…

A: Risk and return are essential financial principles. The term “risk” refers to the uncertainty and…

Q: A stock has had returns of -5.32 percent, -7.58 percent, 4.68 percent, 7.7 percent, 8.98 percent,…

A: The below expression can be used to calculate geometric average return:

Q: If a company has a forward (forecasted) EPS of 5.242 and a forward PE of 76.495, what is the…

A: Price Earning Ratio refers to a financial ratio that is being used in order to value a stock and…

Q: A stock has had the following year-end prices and dividends: Year 1 Price $64.68 2 3 71.55 77.35…

A: Calculation of arithmetic and geometric mean:Excel working with formula:

Q: Calculate the beta adjusted by the degree of freedom for stock X relative to the equity market using…

A: In finance, beta is a measure that indicates the sensitivity of a stock's returns to changes in the…

Q: A stock has had returns of 25 percent, 12 percent, 6 percent, –17 percent, -6 percent, and 22…

A: Arithmetic Return: It is the total return of the stock that is divided by total number of years. It…

Q: A stock has had returns of 21 percent, 13 percent, 8 percent, -11 percent, -3 percent, and 17…

A: The return on stock refers to the profit that the stock provides to the investor for their…

Q: 1. A stock has had the following year-end prices and dividends: Year 1 2 3 4 5 6 Price ($) 93.75…

A: Average return:A financial term known as the average return measures the typical profit or loss on…

Q: A stock has had the following year-end prices and dividends: Year Price $65.03 123456 71.90 77.70…

A: Here,

Q: Returns on stocks X and Y are listed below: Period 1 2 3 4 5 6 7 Stock X 7% 1% -2% -3% 5% 11% 5%…

A: PeriodStock XStock Y10.07-0.0420.010.13-0.020.044-0.030.0850.050.0760.11-0.0170.05-0.03Required:The…

Q: Assume the following information concerning a two-stock portfolio: Stock X Stock Y Please calculate…

A: The formula to calculate correlation coefficient isCorrelation coefficient=Covariance between stock…

Q: the expected returns of the stocks A and B.

A: Expected Return The expected return of the stock is the probability weighted return of the stock. ER…

Q: A stock has had the following year-end prices and dividends: Year 6723456 1 Price $ 65.08 Dividend…

A: The arithmetic average return is the simple average of all returns. The geometric rate of return is…

Q: A stock has had the following year-end prices and dividends: Year Price Dividend 1 $ 64.78 — 2…

A: Year Price Dividend 1  $ 64.78   2  $ 71.65  $      0.69 3  $ 77.45  $      0.74 4  $ 63.72…

Q: Arithmetic average return Geometric average return % olo olo %

A: Return 1 = r1 = 39.50%/100 = 0.3950 in decimalReturn 2 = r2 = 23.50%/100 = 0.2350 in decimalReturn 3…

Q: Percentages need to be entered in decimal format, for instance 3% would be entered as .03. That is…

A: Note: Return of the stock is taken what was provided in the previous question. Please adjust the…

Q: What is the formula for Price to Book Value ( MV/BV) ratio ? If Current Price = 126, Total Equity =…

A: The “Price/Book Value” Ratio (P/BV) is calculated by dividing the price of a share of stock by the…

Q: Directions: Compute the total returns, the average of returns, and the standard deviation of the…

A: Data given: ERGH Inc., Year Stock Price (P) Jan-21 0.088 Feb-21 0.090 Mar-21 0.097…

Q: A stock has had the following year-end prices and dividends:   Year Price Dividend 1 $…

A: Solution Arithmetic Average Return = 9.57% Geometric Average Return = 8.41% Explanation:Step 1:Year…

Q: 4 of stion Determine the market value of a Digicel Stock if Do = 3.00, K₂= 13%, G = 6%. Select one:…

A: D0=$3Growth rate=6%Cost of equity (Ks)=13%

Q: If a company has a forward (forecasted) EPS of 0.757 and a forward PE of 86.995, what is the…

A: The price-earning ratio, or P/E ratio, is another name for the comparison between the market price…

Q: Calculate the upper bound to the 95th confidence interval given the following price and dividend…

A: Price                      Dividend       Dividend Yield$ 64.65                    $1.72…

Q: A stock has had the following year-end prices and dividends: Year 0 1 234 LO 5 Price $ 32.5 34.68…

A: Arithmetic is the simplest form of calculating the average rate of return from the series of…

Q: A stock has had the following year-end prices and dividends: Price $ 64.23 71.10 Year 123456 2 76.90…

A: Arithmetic Average return can be found by using the following formulaGeometric Average return can be…

Q: How do you calcuate the bechmark and historical return for the stock ARKK when the last price listed…

A: Examining historical return can give an understanding into how a security or market has responded to…

Q: A stock has had the following year-end prices and dividends: Year 1 Price Dividend $ 43.41 2 48.39…

A: Step 1: Calculate the Holding Period Returns (HPR) for Each YearTo find the returns for each year,…

Q: A stock has had the following year-end prices and dividends: Year Price Dividend $16.25 1 18.43 $…

A: Geometric return is annualized return found by taking individual return. This return is calculated…

Q: stock has had returns of -7.77 percent, -4.59 percent, 5.87 percent, 9.98 percent, 8.7 percent, and…

A: The below expression can be used to calculate geometric average return:

Q: The following table displays hypothetical stock quotations. Use the information in the table to…

A: Variables in the question:CompanyTickerHighLowLast Price*Net Change**YTD %***Div. YieldP/E…

Q: What is the required rate of return on a preferred stock with a $50 par value, a stated annual…

A: The preferred stock refers to the hybrid model for raising capital where the investor has more right…

Q: 8. (Portfolio of two stocks) The following spreadsheet presents data for stocks A and B. A B C 1 2…

A: Step 1:The return of portfolio is the weighted average return of Stock A and Stock B. Standard…

Q: State Dep Rec Prob 0.1 0.3 Return 0.04 0.18

A: The expected return is the weighted probabilistic rate of return that is realized on stock…

Q: According to the CAPM as stock has a risk premium of 10.4%.  If the risk-free rate is 2.5%, what is…

A: Risk premium = 10.4% Risk free rate = 2.5%

Q: What are the arithmetic and geometric returns for the stock?

A: Arithmetic and Geometric mean are used to calculate the expected mean of the stock Arithmetic Mean…

Q: a. what is return on each of the three shortlisted stock? and what is the standard deviation of the…

A: Here, Probability of Recession is 70% Probability of Normal is 20% Probability of Boom is 10%

Q: A stock has had the following year-end prices and dividends: Price $ 64.63 71.50 77.30 63.57 73.71…

A: Rate of Return = (Ending Price + Dividend - Beginning Price) / Beginning PriceArithmetic Average…

Q: A stock has had returns of -19.1 percent, 29.1 percent, 25.2 percent, -10.2 percent, 34.9 percent,…

A: r1 = - 0.191 r2 = 0.291 r3 = 0.252 r4 = - 0.102 r5 = 0.349 r6 = 0.271   Number of returns (n) = 6

Q: Given the following price and dividend information, calculate the lower bound to the 95th confidence…

A: Step 1: Step 2: Step 3: Step 4:

Q: Find the annualized holding rate of return and the average rate of return for a stock t

A: The holding period return is used to evaluate an investment's overall performance over a given…

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.