To Annualize a Two-Year Holding-Period-Return, You Need to Assume That

question 45

Multiple Choice

To annualize a two-year holding-period-return, you need to assume that:

• A) All cash receipts in the first year are ignored in the calculation
• B) All cash receipts in the first year are reinvested
• C) The arithmetic average will be smaller than the geometric average
• D) There are no outliners in the returns
• E) Nothing

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Definitions:

Debts to Total Assets Ratio

A financial metric indicating the proportion of a company's assets that are financed through debt, assessing financial leverage.

Debt to Stockholders' Equity

A financial ratio that measures the proportion of a company's debt to the equity held by its shareholders.

Debt to Total Retained Earnings Ratio

A financial measure used to evaluate the proportion of a company's debt compared to its retained earnings.

Return on Sales

A measure of a company's profitability that calculates how much of a company's sales are converted to net income.