Consider the following returns for two investments, A and B. over the past four years:Investment 1:Investment 21a-1. Calculate the mean for each investment. (Round your answers to 2 decimal places.)Investment 1Investment 2Investment 1O Investment 26%a-2. Which investment provides the higher return?Investment 1Investment 2Meanb-1. Calculate the standard deviation for each investment. (Round your answers to 2 decimal places.)Investment 1Investment 296%Investment 1Investment 2Standard Deviationb-2. Which investment provides less risk?5165.7.5c-1. Given a risk-free rate of 1.2%, calculate the Sharpe ratio for each investment. (Round your answers to 2 decimal places.Sharpe Ratio

Before computing the Sharpe ratio, it is essential to calculate both the mean (which provides the…

Consider the following returns for two investments. A and B, over the past four years: Investment 1: Investment 2: Investment 1 Investment 2 Investment 1 Investment 2 a-1. Calculate the mean for each investment. (Round your answers to 2 decimal places.) 2% 6% Investment 1 Investment 2 8% 12% Mean a-2. Which investment provides the higher return? Investment 1 Investment 2 Investment 1 Investment 2 % % b-1. Calculate the standard deviation for each investment. (Round your answers to 2 decimal places.) Standard Deviation -4% -8% 196 b-2. Which investment provides less risk? Sharpe Ratio 10% 96 c-1. Given a risk-free rate of 1.2%, calculate the Sharpe ratio for each investment. (Round your answers to 2 decimal pl

Consider the following returns for two investments. A and B, over the past four years: Investment 1: Investment 2: Investment 1 Investment 2 Investment 1 Investment 2 a-1. Calculate the mean for each investment. (Round your answers to 2 decimal places.) 2% 6% Investment 1 Investment 2 8% 12% Mean a-2. Which investment provides the higher return? Investment 1 Investment 2 Investment 1 Investment 2 % % b-1. Calculate the standard deviation for each investment. (Round your answers to 2 decimal places.) Standard Deviation -4% -8% 196 b-2. Which investment provides less risk? Sharpe Ratio 10% 96 c-1. Given a risk-free rate of 1.2%, calculate the Sharpe ratio for each investment. (Round your answers to 2 decimal pl

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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Assume the returns from holding an asset are normally distributed. Also assume the average annual return for holding the asset a period of time was 15.3 percent and the standard deviation of this asset for the period was 33.2 percent. Use the NORMDIST function in Excel® to answer the following questions. a. What is the approximate probability that your money will double in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 3 decimal places, e.g., 32.161.) b. What is the approximate probability that your money will triple in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 8 decimal places, e.g., 32.16161616.)
Assume the returns from holding an asset are normally distributed. Also assume the average annual return for holding the asset a period of time was 16.3 percent and the standard deviation of this asset for the period was 33.5 percent. Use the NORMDIST function in Excel® to answer the following questions. a. What is the approximate probability that your money will double in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 3 decimal places, e.g., 32.161.) b. What is the approximate probability that your money will triple in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 8 decimal places, e.g., 32.16161616.) a. b. Probability Probability Answer is not complete. 0.624 % %
Assume that at the beginning of the year, you purchase an investment for $6,300 that pays $130 annual income. Also assume the investment's value has increased to $6,900 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places. Rate of return % b. Is the rate of return a positive or a negative number? Positive Negative
Assume the returns from holding an asset are normally distributed. Also assume the average annual return for holding the asset a period of time was 17.1 percent and the standard deviation of this asset for the period was 35 percent. Use the NORMDIST function in Excel to answer the following questions. a. What is the approximate probability that your money will double in value in a single year? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 3 decimal places, e.g., 32.161. b. What is the approximate probability that your money will triple in value in a single year? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 8 decimal places, e.g., 32.16161616. a. Probability b. Probability % %
Consider the following asset with it's returns over the last 3 years. The arithmetic mean is 8% 1yr 2yr 3yr 8% 4% 6% What is the geometric mean? (Be sure to go out at least 4 decimal places.) Respuesta:
ok Assume the returns from holding an asset are normally distributed. Also assume the average annual return for holding the asset a period of time was 15.4 percent and the standard deviation of this asset for the period was 33.3 percent. Use the NORMDIST function in Excel to answer the following questions. a. What is the approximate probability that your money will double in value in a single year? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 3 decimal places, e.g., 32.161. b. What is the approximate probability that your money will triple in value in a single year? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 8 decimal places, e.g., 32.16161616. ences a. Probability b. Probability % %
Assume that at the beginning of the year, you purchase an investment for $6,500 that pays $95 annual income. Also assume the investment's value has increased to $7,050 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.
An investment earns 7% the first year, earns 12% the second year, and loses 10% the third year. The geometric average return over the three years was ________ Select one: a. 9.65% b. 2.55% c. 3% d. 3.59% e. 9.67%
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 investment had annual holding period returns of 5%, 12%, and 10% for the last three years. What are the arithmetic average of the rate of returns on the investment? a) 8.33% b) 10% O c) 8.96% d) 12% e) 9% Page 23 of 25 Next Page Previous Page Submit Quiz 19 of 25 questions saved
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.
1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.) 2. Calculate the payback period for Bartlett. (Round your answer to 2 decimal places.)

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