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University
| Teaching Since: | Apr 2017 |
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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
The following information is available concerning the historical risk and return relationships in the U.S. capital markets: Investment Category Arithmetic Mean Geometric Mean Standard Deviation of Returna Common stocks 10.28% 8.81% 16.9% Treasury bills 3.54 3.49 3.2 Long-term government bonds 5.10 4.91 6.4 Long-term corporate bonds 5.95 5.65 9.6 Real estate 9.49 9.44 4.5 aBased on arithmetic mean. a. Explain why the geometric and arithmetic mean returns are not equal and whether one or the other may be more useful for investment decision making. b. For the time period indicated, rank these investments on a relative basis using the coefficient of variation from most to least desirable. Explain your rationale. c. Assume the arithmetic mean returns in these series are normally distributed. Calculate the range of returns that an investor would have expected to achieve 95 percent of the time from holding common stocks.
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