EBK STATISTICS FOR MANAGEMENT AND ECONO
EBK STATISTICS FOR MANAGEMENT AND ECONO
11th Edition
ISBN: 9781337516723
Author: KELLER
Publisher: YUZU
Question
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Chapter 4.1, Problem 11E

(a)

To determine

Estimate the year of return.

(a)

Expert Solution
Check Mark

Explanation of Solution

Table-1 shows the price for a 6 year as follows:

Table-1
YearPrice
110
214
315
422
530
625

The year of return for 6 years can be calculated using Table-1:

Year 1 rate of return can be calculated as follows:

Year 1 rate of return=Price1Old priceOld price=101212=212=0.167

Thus, year 1 rate of return is -0.167.

Year 2 rate of return can be calculated as follows:

Year 2 rate of return=Price2Price1Price1=141010=410=0.4

Thus, year 2 rate of return is 0.4

Year 3 rate of return can be calculated as follows:

Year 3 rate of return=Price3Price2Price2=151414=114=0.071

Thus, year 3 rate of return is 0.071.

Year 4 rate of return can be calculated as follows:

Year 4 rate of return=Price4Price3Price3=221515=0.467

Thus, year 4 rate of return is 0.467.

Year 5 rate of return can be calculated as follows:

Year 5 rate of return=Price5Price4Price4=302222=0.364

Thus, year 5 rate of return is 0.364.

Year 6 rate of return can be calculated as follows:

Year 6 rate of return=Price6Price5Price5=253030=0.167

Thus, year 6 rate of return is -0.167.

(b)

To determine

Determine the mean and median.

(b)

Expert Solution
Check Mark

Explanation of Solution

Table–2 shows the investment over a 6-year period as follows:

Table-2
YearRate of return
1-0.167
20.4
30.071
40.467
50.364
6-0.167
 

The mean can be obtained by summing all observations and dividing the number of observations. The mean can be calculated as follows:

Mean=xin=0.167+0.4+0.071+0.467+0.3640.1676=0.9686=0.161

Thus, the value of mean is 0.161.

Median:

Table-3 shows the sample in the ascending order as follows:

Table-3
YearRate of return
1-0.167
2-0.167
30.071
40.364
50.4
60.467
 

The median can be calculated by arranging all the observations in order of ascending or descending and the observation that falls in the middle is the median.

Median=0.071+0.3642=0.4352=0.2175

Thus, the value of median is 0.218.

(c)

To determine

Determine the geometric mean.

(c)

Expert Solution
Check Mark

Explanation of Solution

The geometric mean can be calculated as follows:

Rg=6(1+R1)(1+R2)(1+R3)(1+R4)(1+R5)(1+R6)1=4(10.167)(1+0.4)(1+0.071)(1+0.467)(1+0.364)(10.167)1=1.1301=0.13

Thus, the value of geometric mean is 0.13.

(d)

To determine

Describe the return over a 4-year period.

(d)

Expert Solution
Check Mark

Explanation of Solution

From the above calculation, the geometric mean is best over the 6-year period because 25(12(1+0.1306)6)

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Chapter 4 Solutions

EBK STATISTICS FOR MANAGEMENT AND ECONO

Ch. 4.1 - Prob. 11ECh. 4.1 - Prob. 12ECh. 4.1 - Prob. 13ECh. 4.1 - Prob. 14ECh. 4.1 - Prob. 15ECh. 4.1 - Prob. 16ECh. 4.1 - Prob. 17ECh. 4.1 - Prob. 18ECh. 4.1 - Prob. 19ECh. 4.1 - Prob. 20ECh. 4.1 - Prob. 21ECh. 4.1 - Prob. 22ECh. 4.1 - Prob. 23ECh. 4.1 - Prob. 24ECh. 4.1 - Prob. 25ECh. 4.1 - Prob. 26ECh. 4.2 - Prob. 27ECh. 4.2 - Prob. 28ECh. 4.2 - Prob. 29ECh. 4.2 - Prob. 30ECh. 4.2 - Prob. 31ECh. 4.2 - Prob. 32ECh. 4.2 - Prob. 33ECh. 4.2 - Prob. 34ECh. 4.2 - Prob. 35ECh. 4.2 - Prob. 36ECh. 4.2 - Prob. 37ECh. 4.2 - Prob. 38ECh. 4.2 - Prob. 39ECh. 4.2 - Prob. 40ECh. 4.2 - Prob. 41ECh. 4.2 - Prob. 42ECh. 4.2 - Prob. 43ECh. 4.2 - Prob. 44ECh. 4.2 - Prob. 45ECh. 4.2 - Prob. 46ECh. 4.2 - Prob. 47ECh. 4.2 - Prob. 48ECh. 4.2 - Prob. 49ECh. 4.2 - Prob. 50ECh. 4.2 - Prob. 51ECh. 4.2 - Prob. 52ECh. 4.2 - Prob. 53ECh. 4.2 - Prob. 54ECh. 4.2 - Prob. 55ECh. 4.2 - Prob. 56ECh. 4.3 - Prob. 57ECh. 4.3 - Prob. 58ECh. 4.3 - Prob. 59ECh. 4.3 - Prob. 60ECh. 4.3 - Prob. 61ECh. 4.3 - Prob. 62ECh. 4.3 - Prob. 63ECh. 4.3 - Prob. 64ECh. 4.3 - Prob. 65ECh. 4.3 - Prob. 66ECh. 4.3 - Prob. 67ECh. 4.3 - Prob. 68ECh. 4.3 - Prob. 69ECh. 4.3 - Prob. 70ECh. 4.3 - Prob. 71ECh. 4.3 - Prob. 72ECh. 4.3 - Prob. 73ECh. 4.3 - Prob. 74ECh. 4.3 - Prob. 75ECh. 4.3 - Prob. 76ECh. 4.3 - Prob. 77ECh. 4.3 - Prob. 78ECh. 4.3 - Prob. 79ECh. 4.3 - Prob. 80ECh. 4.3 - Prob. 81ECh. 4.3 - Prob. 82ECh. 4.4 - Prob. 83ECh. 4.4 - Prob. 84ECh. 4.4 - Prob. 85ECh. 4.4 - Prob. 86ECh. 4.4 - Prob. 87ECh. 4.4 - Prob. 88ECh. 4.4 - Prob. 89ECh. 4.4 - Prob. 90ECh. 4.4 - Prob. 91ECh. 4.4 - Prob. 92ECh. 4.4 - Prob. 93ECh. 4.4 - Prob. 94ECh. 4.4 - Prob. 95ECh. 4.4 - Prob. 96ECh. 4.4 - Prob. 97ECh. 4.4 - Prob. 98ECh. 4.4 - Prob. 99ECh. 4.4 - Prob. 100ECh. 4.4 - Prob. 101ECh. 4.4 - Prob. 102ECh. 4.4 - Prob. 103ECh. 4.4 - Prob. 104ECh. 4.4 - Xr04-105 The number of wins, team payrolls, home...Ch. 4.4 - Prob. 106ECh. 4.4 - Prob. 107ECh. 4.4 - Prob. 108ECh. 4.4 - Prob. 109ECh. 4.4 - Prob. 110ECh. 4.5 - Prob. 111ECh. 4.5 - Prob. 112ECh. 4.5 - Prob. 113ECh. 4.5 - Prob. 114ECh. 4.5 - Prob. 115ECh. 4.5 - Prob. 116ECh. 4.5 - Prob. 117ECh. 4.5 - Prob. 118ECh. 4.5 - Prob. 119ECh. 4.5 - Prob. 120ECh. 4.5 - Prob. 121ECh. 4.5 - Prob. 122ECh. 4.5 - Prob. 123ECh. 4.5 - Prob. 124ECh. 4.5 - Prob. 125ECh. 4.5 - Prob. 126ECh. 4.5 - Prob. 127ECh. 4.5 - Prob. 128ECh. 4.5 - Prob. 129ECh. 4.5 - Prob. 130ECh. 4.5 - Prob. 131ECh. 4.6 - Prob. 132ECh. 4.6 - Prob. 133ECh. 4.6 - Prob. 134ECh. 4.6 - Prob. 135ECh. 4.6 - Prob. 136ECh. 4.6 - Prob. 137ECh. 4.6 - Prob. 138ECh. 4 - Prob. 139CECh. 4 - Prob. 140CECh. 4 - Prob. 141CECh. 4 - Prob. 142CECh. 4 - Prob. 143CECh. 4 - Prob. 144CECh. 4 - Prob. 145CECh. 4 - Prob. 146CECh. 4 - Prob. 147CECh. 4 - Prob. 148CECh. 4 - Prob. 149CECh. 4 - Prob. 150CECh. 4 - Prob. 151CECh. 4 - Prob. 152CECh. 4 - Prob. 153CECh. 4 - Prob. 154CE
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