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
Related questions
Question
What is the likely frequency of the data (daily, monthly, yearly)? Compare to historical historical data in the picture to justify the answer.
![The last ten observations of the holding period returns (HPR) of stock XYZ are given in the
following table:
Period
1234567
7
8
9
10
XYZ
-3%
2%
6%
-5%
-10%
10%
3%
7%
0%
-3%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F244be6eb-07da-4aa9-92ad-dac5735e946a%2Fe46e6bd2-16db-4463-91a4-6169bc7f0e47%2Fxfbuxe_processed.png&w=3840&q=75)
Transcribed Image Text:The last ten observations of the holding period returns (HPR) of stock XYZ are given in the
following table:
Period
1234567
7
8
9
10
XYZ
-3%
2%
6%
-5%
-10%
10%
3%
7%
0%
-3%
![TABLE 4.4
Australia
Belgium
Canada
Denmark
Finland
France
Germany
Ireland
HISTORICAL RETURNS FOR MAJOR ASSET CLASSES (1900–2017)
Average Annual Rates of Return
Long-Term
Government Bonds
Italy
Japan
Netherlands
New Zealand
Norway
South Africa
Spain
Sweden
Switzerland
Stocks
12.2%
10.2%
10.2%
11.4%
16.4%
13.0%
13.4%
11.0%
14.2%
14.5%
10.3%
11.8%
11.0%
14.7%
11.5%
11.5%
8.4%
11.2%
11.5%
9.6%
6.1%
5.9%
Short-Term
Government Bills
4.5%
4.7%
4.5%
5.9%
6.5%
4.7%
3.4%
4.8%
4.3%
4.7%
3.4%
5.4%
4.8%
6.1%
5.9%
5.2%
2.9%
4.8%
3.8%
3.8%
5.6%
7.5%
7.4%
7.4%
5.3%
6.5%
7.3%
6.7%
4.9%
6.2%
5.9%
7.3%
8.0%
6.6%
4.7%
United Kingdom
6.2%
United States
5.3%
World
5.3%
(Source: Data from Credit Suisse Global Investment Returns Yearbook 2018.)
Inflation
3.8%
6.0%
3.1%
3.9%
8.6%
7.4%
5.3%
4.3%
10.3%
9.8%
2.9%
3.7%
3.9%
5.2%
5.7%
3.5%
2.3%
3.9%
3.0%
3.0%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F244be6eb-07da-4aa9-92ad-dac5735e946a%2Fe46e6bd2-16db-4463-91a4-6169bc7f0e47%2Fc2grtgp_processed.png&w=3840&q=75)
Transcribed Image Text:TABLE 4.4
Australia
Belgium
Canada
Denmark
Finland
France
Germany
Ireland
HISTORICAL RETURNS FOR MAJOR ASSET CLASSES (1900–2017)
Average Annual Rates of Return
Long-Term
Government Bonds
Italy
Japan
Netherlands
New Zealand
Norway
South Africa
Spain
Sweden
Switzerland
Stocks
12.2%
10.2%
10.2%
11.4%
16.4%
13.0%
13.4%
11.0%
14.2%
14.5%
10.3%
11.8%
11.0%
14.7%
11.5%
11.5%
8.4%
11.2%
11.5%
9.6%
6.1%
5.9%
Short-Term
Government Bills
4.5%
4.7%
4.5%
5.9%
6.5%
4.7%
3.4%
4.8%
4.3%
4.7%
3.4%
5.4%
4.8%
6.1%
5.9%
5.2%
2.9%
4.8%
3.8%
3.8%
5.6%
7.5%
7.4%
7.4%
5.3%
6.5%
7.3%
6.7%
4.9%
6.2%
5.9%
7.3%
8.0%
6.6%
4.7%
United Kingdom
6.2%
United States
5.3%
World
5.3%
(Source: Data from Credit Suisse Global Investment Returns Yearbook 2018.)
Inflation
3.8%
6.0%
3.1%
3.9%
8.6%
7.4%
5.3%
4.3%
10.3%
9.8%
2.9%
3.7%
3.9%
5.2%
5.7%
3.5%
2.3%
3.9%
3.0%
3.0%
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