BUSI 4502 Lecture Notes - Lecture 4: Dividend Yield, Standard Deviation, Capital Market
30 Aug 2018
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Article 12 what rate of return can you reasonably expect When it comes to investing, the most uncertain issue for investors is the rate of return expected in the long run. According to ibbotson associates database, the long run rate of return on large capitalized equities is 10. 5% and return on treasury bonds in long run is 5. 2% over 70 years. The main aim of the study is determine if previous long run return can be used to determine returns in the future. Two different analyses were made for equities and bond returns. The basic annual return is defined as long- term rate of return independent of changes in valuation. As for the equities, the samples are combination of siegel annual return data and ibbotson quarterly return data with information on stock prices, earnings and dividends. The sample period is between 1871 and 1995.
