The price of share A will change from January to July as follows: $100 (January price), $105 (February price, etc.), $10
Posted: Wed Mar 30, 2022 3:51 pm
The price of share A will change from January to July as
follows: $100 (January price), $105 (February price, etc.), $109,
115, 114, 99 and 55. A dividend of two dollars will be paid in May.
In July, the share will be split so that one share becomes two.
Calculate the simple net return. Calculate the continuously
compounded return. Calculate the average simple net return. Do the
same for continuously compounded returns. Finally, calculate the
difference between the averages (the average of the simple net
return - the average of the continuously compounded return).
1.What is the difference between the averages ?
2.Calculate the volatility and variance of the simple net return
and continuously compounded return. When you add all four values
together, what is the end result?
follows: $100 (January price), $105 (February price, etc.), $109,
115, 114, 99 and 55. A dividend of two dollars will be paid in May.
In July, the share will be split so that one share becomes two.
Calculate the simple net return. Calculate the continuously
compounded return. Calculate the average simple net return. Do the
same for continuously compounded returns. Finally, calculate the
difference between the averages (the average of the simple net
return - the average of the continuously compounded return).
1.What is the difference between the averages ?
2.Calculate the volatility and variance of the simple net return
and continuously compounded return. When you add all four values
together, what is the end result?