The data below are (annualized) daily rates of return on Microsoft Stock. You ar

Question

The data below are (annualized) daily rates of return on Microsoft Stock. You are considering investing $1,000 in Microsft.

-Based on the data below, predict how much your investment will be worth in one year.

Date Daily Rate of Return, MSFT (annualized) Daily Rate of Return, DELL (annualized) 1-Jan 9.8% 3.8% 2-Jan 3.3% 8.0% 3-Jan 6.6% 5.8% 4-Jan 11.8% 11.4% 5-Jan -0.8% 6.7% 6-Jan 9.5% 10.5% 7-Jan 0.8% 1.5% 8-Jan 4.6% 4.0% 9-Jan 8.7% 2.6% 10-Jan 9.0% 6.8% 11-Jan 4.8% 5.3% 12-Jan 4.4% 3.1% 13-Jan 2.2% 7.0% 14-Jan 0.0% 6.8% 15-Jan 6.2% 4.0% 16-Jan 8.1% 2.1% 17-Jan 5.5% 8.8% 18-Jan 8.4% 6.7% 19-Jan 4.3% 8.5% 20-Jan 4.6% 0.4% 21-Jan 9.3% -3.0% 22-Jan 6.4% 2.0% 23-Jan 11.1% 0.8% 24-Jan 6.3% 5.5% 25-Jan 9.1% 0.4% 26-Jan 1.6% -2.0% 27-Jan 9.0% 2.0% 28-Jan 7.2% 0.9% 29-Jan 11.5% 2.8% 30-Jan 14.0% 10.4% 31-Jan 6.4% 1.4% 1-Feb 3.7% 7.0% 2-Feb 5.9% 3.5% 3-Feb 4.2% 7.7% 4-Feb 7.0% 9.9% 5-Feb -0.2% 5.8% 6-Feb 8.4% 6.1% 7-Feb 5.7% 0.2% 8-Feb 3.8% 3.6% 9-Feb 0.9% 0.1% 10-Feb 13.0% 4.4% 11-Feb 8.1% 9.3% 12-Feb 0.2% 4.9% 13-Feb 1.1% 11.2% 14-Feb 10.1% -1.0% 15-Feb 7.4% 1.6% 16-Feb 8.5% 15.1% 17-Feb 2.1% 1.7% 18-Feb 3.4% 9.1% 19-Feb 4.2% 5.3% 20-Feb 12.2% 7.0% 21-Feb 2.4% 4.6% 22-Feb 1.2% 10.6% 23-Feb 9.8% 2.6% 24-Feb 5.8% -0.3% 25-Feb 5.7% 5.9% 26-Feb 8.9% -4.7% 27-Feb 3.1% 4.3% 28-Feb 5.9% 1.7% 1-Mar 6.9% 11.2% 2-Mar 12.0% 5.5% 3-Mar 7.3% 5.1% 4-Mar 6.2% 4.5% 5-Mar 0.1% 7.6% 6-Mar 5.6% -0.9% 7-Mar 0.6% 6.7% 8-Mar 4.5% 3.8% 9-Mar 13.1% 15.5% 10-Mar 0.2% 6.6% 11-Mar 9.5% 3.0% 12-Mar 1.2% 5.4% 13-Mar 5.4% 10.5% 14-Mar 11.6% 11.7% 15-Mar 6.9% 4.7% 16-Mar 7.2% 2.1% 17-Mar 6.3% 7.4% 18-Mar 2.0% 5.4% 19-Mar 5.5% -1.2% 20-Mar 13.3% -3.8% 21-Mar 7.4% 6.8% 22-Mar 10.8% 4.9% 23-Mar 6.3% 8.4% 24-Mar 4.5% 3.9% 25-Mar 9.3% 4.0% 26-Mar 4.3% 5.3% 27-Mar 2.2% 0.4% 28-Mar 7.0% 0.0% 29-Mar 2.6% 0.7% 30-Mar 6.9% 4.8% 31-Mar 1.4% 3.0% 1-Apr 3.9% 9.1% 2-Apr 2.9% 8.1% 3-Apr 2.1% 0.5% 4-Apr 3.9% 8.2% 5-Apr 8.5% 9.1% 6-Apr 1.8% 8.8% 7-Apr 2.8% 5.2% 8-Apr 10.6% 7.2% 9-Apr 1.9% 4.7% 10-Apr 3.6% -0.6% 11-Apr 7.5% 6.6% 12-Apr 9.4% -3.4% 13-Apr 5.6% 4.2% 14-Apr 7.5% 4.0% 15-Apr 5.6% -2.0% 16-Apr 5.8% 4.9% 17-Apr 6.8% 2.0% 18-Apr 7.4% 4.8% 19-Apr 5.6% 4.4% 20-Apr 5.9% 6.6% 21-Apr 6.1% 6.6% 22-Apr 5.7% 8.9% 23-Apr 5.5% 5.0%

Explanation / Answer

Average daily rate of return = 5.94%

Annual rate of return = 12*5.94

= 71.224%

Worth after one year = 1000*1.71224

= $1712.24

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