Return

Clients typically receive a high return on investment from the program when compared to the one-off ad-hoc pricing they would have had to pay if they had not signed Premier Pass. This high return on investment for the clients is skewed, however, because had they been required to pay full price for each enrollment, many clients would not have sent that many participants to virtual classes to begin with. This is where the disconnect was with leadership views that Premier Pass was causing the…

tend to be most relevant for two mutually exclusive events. In investing, it is the difference in return between a chosen investment and one that the consumer or producer passed up. Considering the potential outcomes of various investments decisons, businesses will look for the option that is most likely to generate the greatest return. Often, this can be found by looking at the expected rate of return for a given investment. Even with this being the case, businesses must also still consider the…

necessary to analyze net present value and internal rate of return to gauge return on investment. DT LLC has decided to use three depreciation methods – including straight-line, sum-of-the-year’s digits, and MACRS depreciation – to determine the profitability of XYZ’s investment. DT LLC’s accounting department believes analyzing the computer system investment through three separate depreciation methods would give a comprehensive overview of the return on this investment. DT LLC used the…

For example, if σ = 45% and ρ = 0.2, then the standard deviation with 50 stocks would be 20.91%, and would rise to 22.05% when only 20 stocks are held. Such an increase might be acceptable if the expected return is increased sufficiently. Hennessy could contain the increase in risk by making sure that he maintains reasonable diversification among the 20 stocks that remain in his portfolio. This entails maintaining a low correlation among the remaining stocks. For example, in part (a), with ρ = 0…

relationships (linear relationship) between two or more securities. They help to show how securities are performing in relation to one another; the possible range for the correlation coefficient is -1 to +1. A positive correlation means two different asset returns are moving in the same direction over time. A negative correlation is just the opposite; they are moving in different directions over time. If the correlation is 0, there is no…

measured by cumulative stock returns, Return on Assets and Return on Equity. Also will control…

that neither historical growth nor management forecasts are good predictors of future growth, some authors (Damodaran 2011) suggest to rely on fundamental analysis. The growth rate is a function of the percentage of the reinvested earnings and the return earnings on that investment.In order to understand how the company's value is affected by a change in the underlying assumptions, a sensitivity analysis is usually conducted. For instance, starting from the base scenario it is possible to…

that the yield curve illustrates how the returns of bonds and maturity changes over time. There are four approaches that elaborates on the different shapes of the yield curve, they are the expectation, liquidity-premium, segment market and preferred habitat theory. These theories explain the different shapes the yield curve can take: upward, downward, inverted and humped yield, of which for example the upward slop yield states that there are higher returns when maturity increases.…

these averages, especially given the high returns and volatility of the bond markets shown in Exhibits 4 and 5. He was concerned also about which measure of expected returns should be used. Exhibits 4 and 5 present two different measures of average annual return, the arithmetic and the geometric. The arithmetic average return is the sum of the annual returns over the time period divided by the number of years in the time interval. The geometric average return is the compound average growth rate…

Successful stock trading certainly depends on various factors, but one of the important ones among them is the ability to diversify your stock portfolio. This strategy is essential for achieving success, and also offers numerous other advantages. Here, we share the most important ones that will help you in understanding the importance of diversity in stock trading. Risk Reduction The first and foremost advantage of using a diverse stock portfolio is that it reduces the risk of losing your…