Answers

1. The correct option is D. 0%.

   The annual realized return for Amazon.com is 0%.

   What is annual realized return?

   An average annual total return would be the geometric average sum of money generated by an investment over a specific time period.

   Some key features of annual realised/total returns are-

   • An annualized total yield provides merely a glimpse of an investment’s performance and gives no indication of volatility or price variations to investors.
   • An annualized return formula is a geometric average that shows what an investment would receive if the annual return were compounded over time.
   • An annualized rate of return is calculated only using two variables: total returns for a specific period and the time the transaction was kept.

   Now, according to the question;

   The realized returns for 4 quarters are;

   15%, 15%, -15%, and-15%

   Thus,

   Annual realized return = (sum of realized return of 4 quarters)/ 4

                                        = (15% + 15% – 15% – 15%)/4

   Annual realized return = 0%

   Therefore, the annual realized return for Amazon.com is 0%.

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   The correct question is-

   Amazon.com stock prices gave a realized return of 15%, 15%, -15%, and-15% over four successive quarters. for the year? What is the annual realized return for Amazon.com A. -445% B. -7.12%c. -5.12% D. 0%

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