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defon
3 years ago
6

A stock has had the following year-end prices and dividends:Year Price Dividend1 $ 64.73 â 2 71.60 $ .68 3 77.40 .73 4 63.67 .79

5 73.91 .88 6 83.75 .95 What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)Arithmetic average return %Geometric average return %
Business
1 answer:
balandron [24]3 years ago
3 0

Answer:

Arithmetic average return = 7.23%

Geometric average return=6.44%

Explanation:

Calculation for the Arithmetic average return

First step is to calculate the return for each year

Using this formula

Return=(Current year price amount-Previous price amount + Current year dividend)/ Previous year price amount ×100

Let plug in the formula

Year 1 Return= ($71.60-$64.73 + $.68) / $64.73

Year 1 Return=$7.55/$64.73

Year 1 Return= 11.66%

Year 2 Return= ($77.40-$71.60 + $.73) / $71.60

Year 2 Return=$6.53=$71.60

Year 2 Return = 9.12%

Year 3 Return= ($63.67-$77.40 +$ .79) / $77.40 Year 3 Return=$-12.94/$77.40

Year 3 Return=-16.72%

Year 4 Return= ($73.91-$63.67 +$ .88) / $63.67

Year 4 Return=$11.12/$63.67

Year 4 Return = 17.47%

Year 5 Return= ($83.75-$73.91 + $.95) / $73.91 Year 5 Return=$10.79/$73.91

Year 5 Return= 14.60%

The second step is to calculate the arithmetic average return

Using the formula

Arithmetic average return = (Addition of the each year return percentage /Numbers of years)

Let plug in the formula

Arithmetic average return (.1166 + .0912-.1672 + .1747 + .1460) / 5

Arithmetic average return =0.3613/5

Arithmetic average return = .0723 ×100

Arithmetic average return = 7.23%

Calculation for the geometric average return

Using this formula

Geometric average return=(1+Each year return percentage)^1/Numbers of years-1)

Let plug in the formula

Geometric average return== [(1 + .1166)×(1 + .0912)×(1-.1672)×(1 + .1747)×(1 + .1460)]^1/5-1

Geometric average return=[(1.1166)×(1.0912)(0.8328)×(1.1747)×(1.146)]^1/5-1

Geometric average return=(1.366011)^1/5-1

Geometric average return=1.0644

Geometric average return=1.0644-1

Geometric average return=0.0644

Geometric average return=0.0644 ×100

Geometric average return=6.44%

Therefore the Arithmetic average return is 7.23% while Geometric average return is 6.44%.

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Answer:

D. A conglomerate

Explanation:

A Conglomerate is a big corporation that is composed of a various combinations of business entities seemingly unrelated but under one corporate group. It is a big organization that has numerous products and services which vary extensively from one another. It is a big parent company comprising of many subsidiaries producing different products and offering different services. In this case, Red Empire is a conglomerate, the parent company having subsidiaries in petroleum, capital markets, chemicals, steel, beverages, hospitality, airlines, education, automobiles, and consumer electronics industries all with their various brand names.

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Answer:

Total Cost of the Job    $

Direct materials             480

Direct labour                  150

Additional labour           100

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Total cost                        1,330

The total amount to be transferred to finished goods inventory in November is $1,330.                                

Explanation:

The total cost of the job  is the total of direct material, direct labour, additional labour and manufacturing overhead applied. The additional labour cost is considered because it is required to complete the job.

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At contract maturity the value of a call option is ___________, where X equals the option's strike price and ST is the stock pri
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A. Max (0, ST - X)

Explanation:

call option which is also known as a "call", can be regarded as a contract, that exist between both buyer as well as the seller of the call option, in so that security exchange at a set price can occur. It should be noted that At contract maturity the value of a call option is Max (0, ST - X) where X equals the option's strike price and ST is the stock price at contract expiration.

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Identify the following as a fixed asset (FA), or intangible asset (IA), natural resource (NR), or none of these (N). a. Computer
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Answer:

a. Computer - fixed asset

b. Patent - intangible asset

c. Oil reserve - natural resource

d. Goodwill - intangible asset

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f. Land used for employee parking - fixed asset

g. Gold mine - natural resource

Explanation:

Intangible assets are the assets of a company that cannot be seen or they are not physical in nature. They are usually difficult to evaluate. They include:

  1. Goodwill
  2. Patent
  3. Trademarks
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If Dakota Company issues 1,500 shares of $6 par common stock for $75,000,
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No of shares 1,500

Par value $6

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Par value of stock = No of shares x Par value

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