Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. suppose that an investor opens an account by inves

Suppose that an investor opens an account by investing $1,000. At the beginning of each of...

90.2K

Verified Solution

Question

Finance

Suppose that an investor opens an account by investing $1,000.At the beginning of each of the next four years, he deposits anadditional $1,000 each year, and he then liquidates the account atthe end of the total five-year period. Suppose that the yearlyreturns in this account, beginning in year 1, are as follows: −9percent, 17 percent, 9 percent, 14 percent, and −4 percent.

a. Calculate the arithmetic and geometricaverage returns for this investment. (Do not roundintermediate calculations. Enter your answers as a percent roundedto 2 decimal places.)

Arithmetic Return _______%

Geometric Return_______%

b. Determine what the investor’s actualdollar-weighted average return was for this five-year period.(Do not round intermediate calculations. Enter your answeras a percent rounded to 2 decimal places.)

Dollar-weighted average return

Answer & Explanation Solved by verified expert
3.9 Ratings (768 Votes)
    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Electronic configuration of some elements is given in column I and their electron gain entalpies...

Physics
Q

If you forgot to apply the safranin counterstain while performing a Gram stain which outcome...

Biology
Q

Find R and 8 given the components R 4 788 and Ry R 8 008

Basic Math
Q

SOLVE x 7 3x O 4 5 1 5 O 1 5 9 25 O...

Algebra
Q

In Canada, the number of new Covid-19 cases reported daily in June are the following:...

Algebra
Q

Riverbed Company estimates its bad debt expense to be 8% of gross accounts receivable. Determine...

Accounting
Q

The Comodores ltd wants to determine its liquidity position in 6 years from closure of...

Accounting
Q

Ferran operates a boutique yarn store from their own. The store had accounting income after...

Accounting
Q

026 062 0901 R96 026 R42 R42 036 40 016 80

Accounting
Q

18 | merchandise inventory that cost $17,100 under terms of 4/10, n/30 and FOB shipping...

Accounting
Q

Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their...

Accounting
Q

Cade's Furnishings has one issue of bonds outstanding. The bonds pay a 9.70 percent semiannual...

Finance