FINANCE-The _________ measure of returns ignores Compounding

QUESTION

A. The _________ measure of returns ignores CompoundingGeometric averageArithmetic averageIRRDollar-weightedB. The geometric average of -12%, 20%, and 25% is____8.42%11%9.7%18.88%C. Your investment has a 20% chance of earning a 30% rate ofreturn, a 50% chance of earning a 10% rate of return, and a 30%chance of losing 6%. What is your expected return on thisinvestment?12.8%11%8.9%9.2%D. Your investment has a 40% chance of earning a 15% rate ofreturn, a 50% chance of earning a 10% rate of return, and a 10%chance of losing 3%. What is the standard deviation of thisinvestment?5.14%7.59%8.22%9.3%E. Historically, the best asset for the long-term investor wantingto fend off the threats of inflation and taxes while making hismoney grow has beenBondsStocksTreasury BillsMoney Market FundsF. The holding-period return on a stock was 25%. Its ending pricewas $18, and its beginning price was $16. Its cash dividend musthave been$.252.8%$4$2G. You have the following rates of return for a risky portfolio forseveral recent years:2008 35.23%2009 18.67%2010 -9.87%2011 23.45%H. The annualized (geometric) average return on this investmentis16.15%16.87%21.32%15.60%I. A security with normally distributed returns has an annualexpected return of 18% and standard deviation of 23%. Theprobability of getting a return between -28% and 64% in any oneyear is68.26%95.44%99.74%2.5%

 

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