If you own a stock with volatile returns over a 2-year period, will the average return be higher or lower than the geometric return? Explain why.

Description

How do you feel about the following statement: “Avoiding risks is the biggest risk of all”? That statement may seem contradictory at first, but it makes more sense if you apply the concept to various situations in life and business. For example, many people pursue a college degree because they feel it will increase their job prospects and earning potential. This can turn out to be true but is not a guarantee. Others may find this path too risky and prefer to enter the job market right away. Although the first group of people take the risk of their college degree paying off in the long run, the second group are also taking the risk of limiting their potential for the future. Similarly, the nature of entrepreneurship is built upon the risk of investing time and money into something that could potentially fail. Even established businesses could become outdated or be outperformed if they stop taking certain risks. Just as the concept of risk can apply in a general sense, it also applies to investments that individuals and businesses make. Calculated investment risks are not always guaranteed to pay off, but a zero-risk approach may not be as safe as it sounds either.

In this Assignment, you will address questions related to returns and risk premiums.

To prepare for this Assignment:

Review this week’s Learning Resources.

Refer to the Academic Writing Expectations for 2000/3000-Level Courses as you compose your Assignment.

By Day 7

Submit your responses to the following prompts.

Explain the differences between the arithmetic return and the geometric return. Include in your explanation what factor determines the difference between arithmetic returns and geometric (compounded) returns. (75–150 words, or 1–2 paragraphs)

If you own a stock with volatile returns over a 2-year period, will the average return be higher or lower than the geometric return? Explain why. (75–150 words, or 1–2 paragraphs)

Why is it more convenient to display your investment returns in percentage terms rather than dollar terms? (75–150 words, or 1–2 paragraphs)

Would a common stock or a corporate bond demand a higher risk premium? Explain why. (75–150 words, or 1–2 paragraphs)

What are the differences between a bond risk premium and an equity risk premium? (75–150 words, or 1–2 paragraphs)

Explain whether it is possible to earn excess returns without taking on additional risk. (75–150 words, or 1–2 paragraphs)

The post If you own a stock with volatile returns over a 2-year period, will the average return be higher or lower than the geometric return? Explain why. appeared first on Essay Quoll.

HelpHub
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Choose HelpHub

HelpHub

Quality Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

HelpHub

Qualified Writers

We have hired a team of professional writers experienced in academic and business writing. Most of them are native speakers and PhD holders able to take care of any assignment you need help with.

StudyAcer

Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account.

StudyAcer

On Time Delivery

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. We will always strive to deliver on time.

StudyAcer

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text.

StudyAcer

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Help Hub

Place your order

Fill in the order form and provide all details of your assignment.

Help Hub

Proceed with the payment

Choose the payment system that suits you most.

Help Hub

Receive the final file

Once your paper is ready, we will email it to you.

HelpHub Writing Services

No need to work on essay at night. Sleep tight, we will cover your back. We offer all kinds of essay writing services.

HelpHub HelpHub

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

HelpHub HelpHub

Admissions

Admission Essays

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

HelpHub HelpHub

Editing

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

HelpHub HelpHub

Revision

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied.