The Following Is Return Data for a Retail Sector ETF

question 14

Essay

The following is return data for a retail sector ETF and energy sector ETF for the years, Year 1 to Year 5. (See the Excel Data File.)
A) What is the arithmetic mean return for each ETF?
B) What is the geometric mean return for each ETF?
C) What is the sample standard deviation for each ETF? Which ETF was riskier over this time period?
D) Given a risk free rate of 5%, what is the Sharpe Ratio for each ETF? Which investment had a better return per unit of risk over this time period?

• A) What is the arithmetic mean return for each ETF?
• B) What is the geometric mean return for each ETF?
• C) What is the sample standard deviation for each ETF? Which ETF was riskier over this time period?
• D) Given a risk free rate of 5%, what is the Sharpe Ratio for each ETF? Which investment had a better return per unit of risk over this time period?

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Definitions:

Structure

The arrangement or organization of components into a coherent, systematic, or orderly whole.

Increased

The state of having become larger or greater in size, amount, number, or degree.

Classical Organizational Theorists

Refer to scholars and thinkers who developed the initial frameworks and theories on how organizations are structurally and functionally designed for efficiency and productivity, including Max Weber and Frederick Taylor.

Modular Organization

A network organization that performs a few core functions and outsources other activities to specialists and suppliers.