F371 Essn. of Corporate Finance >C< By Ross MCG Custom ISBN 9781259320576
F371 Essn. of Corporate Finance >C< By Ross MCG Custom ISBN 9781259320576
14th Edition
ISBN: 9781259320576
Author: Ross, Westerfield, Jordan
Publisher: MCG CUSTOM
Question
Book Icon
Chapter 10.5, Problem 10.5BCQ
Summary Introduction

To discuss: The type of average return that the investor should use to forecast the stock market prices for the next century.

Introduction:

Total return refers to the total income from an investment. It includes the periodic incomes and the increase or decrease in the value of an asset.

Average returns refer to the returns that the investments earn in a typical year.

Arithmetic average return refers to the returns that an investment earns in an average year over different periods.

Geometric average return refers to the return per year after compounding the average returns for multiple years.

Blurred answer
Students have asked these similar questions
Name the econometric term used for estimating the correlation between today’s stock price and the price of previous days (lag prices).
You have estimated the following probability distributions of expected future returns for Stocks X and Y: Stock X Stock Y Probability Return Probability Return 0.1   -12 % 0.2   4 % 0.1   11   0.2   7   0.3   14   0.3   11   0.3   30   0.2   17   0.2   40   0.1   30   What is the expected rate of return for Stock X? Stock Y? Round your answers to one decimal place.Stock X:   % Stock Y:   % What is the standard deviation of expected returns for Stock X? For Stock Y? Round your answers to two decimal places.Stock X:   % Stock Y:   % Which stock would you consider to be riskier? is riskier because it has a  standard deviation of returns.
The metric that is used to show the extent to which a given stock’s return move up and down with the stock market?   a. Correlation b. Beta c. Standard deviation d. Expected return

Chapter 10 Solutions

F371 Essn. of Corporate Finance >C< By Ross MCG Custom ISBN 9781259320576

Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Business/Professional Ethics Directors/Executives...
Accounting
ISBN:9781337485913
Author:BROOKS
Publisher:Cengage
Text book image
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Text book image
Personal Finance
Finance
ISBN:9781337669214
Author:GARMAN
Publisher:Cengage
Text book image
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Text book image
Entrepreneurial Finance
Finance
ISBN:9781337635653
Author:Leach
Publisher:Cengage