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- The last four years of returns for a stock are as follows: Year Return 1 - 4.3% 2 28.1% 3 11.6% a. What is the average annual return? b. What is the variance of the stock's returns? c. What is the standard deviation of the stock's returns? a. What is the average annual return? The average return is%. (Round to two decimal places.) 4 3.7%The last four years of returns for a stock are as follows: Year 1 2 3 4 Return 4.3% 28.1% 12.3% 3.9% a. What is the average annual return? b. What is the variance of the stock's returns? c. What is the standard deviation of the stock's returns?Please use excel to complete.
- You have been following a stock for 6 months and the following is its past return Year 1: -5% Year 2: -10% Year 3: 15% Year 4: 5% Year 5: 10% Year 6: 15% What is the expected return and standard deviation of the stock based on the historical data? Assume normal distribution, what is VaR at 5% for this stock? What is the Sharpe ratio of the stock based on historical data, risk free rate is 1%?The following shows the expected percentage returns on three stocks over the next six years:Stock Percentage Return (%)Year 1 2 3 4 5 6A 10 5 6 8 12 15B 8 4 4. 80 6.4 9.6 12C 5 10 12 10 6 6 Required:(i) Find the expected return for each of the stock.(ii) Compute the variance and standard deviation for stock A, B and C. Show your working.(iii) Justify how can you minimize the risk of the above combination of stocks. (Must show working method as well)If the return on stock A in year 1 was 14 %, in year 2 was 19 %, in year 3 was 17 % and in year 4 was -9 %, what was the standard deviation of returns for stock A over this four year period? (Round your answer to 1 decimal place and record without a percent sign. If your final answer is negative, place a minus sign before the number with no space between the sign and the number).
- Assume the returns of a stock for the previous five years are as follows: 8%, 12%, - 4%, 9% and 14%. a. What is the arithmetic average? What is the geometric average? b. What is the historical standard deviation of the returns of this stock? c. Another stock in the same industry has had the following year end prices and dividends: Year Price $60.18 73.66 94.18 89.35 78.49 95.05 Dividend 1 $.60 .64 .72 .80 1.20 4 What are the arithmetic and geometric returns for the stock? d. You buy a stock for $62.50 per share and hold it for one year. During the year, the stock paid a dividend of $1.50 and the year-end stock price was $71.25. What was your holding period return on the stock? Also, divide the return of the stock into its two components: the dividend yield and the capital gains component. e. Explain the three forms of market efficiency and its significance as it relates to trading strategies. T23t56During the past five years, you owned two stocks that had the following annual rates of return: Year Stock T Stock B 1 0.19 0.08 2 0.08 0.03 3 −0.12 −0.09 4 −0.03 0.02 5 0.15 0.04 Compute the arithmetic mean annual rate of return for each stock. Which stock is most desirable by this measure? Compute the standard deviation of the annual rate of return for each stock. (Use Chapter 1 Appendix if necessary.) By this measure, which is the preferable stock? Compute the coefficient of variation for each stock. (Use the Chapter 1 Appendix if necessary.) By this relative measure of risk, which stock is preferable? Compute the geometric mean rate of return for each stock. Discuss the difference between the arithmetic mean return and the geometric mean return for each…You find a certain stock that had returns of 10 percent, −17 percent, 23 percent, and 15 percent for four of the last five years. The average return of the stock over this period was 10 percent. a. What was the stock’s return for the missing year? b. What is the standard deviation of the stock’s returns?
- The table given below reports last five years data on annual rates of return (HPYS) on two stocks Year Stock A (%) Stock B (%) 1 16 -10 24 40 30 10 5 -20 20 2. Compute the standard deviation for each stock. Which stock is preferable by this measure measureThe continuously compounded annual return on a stock is normally distributed with a mean of 28% and standard deviation of 30%. With 95.44% confidence, we should expect its actual return in any particular year to be between which pair of values? Hint: Refer to Figure. multiple choice A. −32.0% and 88.0% B. −20.0% and 88.0% C. −62.0% and 118.0% D. −2.0% and 58.0%You find a certain stock that had returns of 16 percent, −23 percent, 24 percent, and 9 percent for four of the last five years. The average return of the stock over this period was 10.2 percent. a. What was the stock’s return for the missing year? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b. What is the standard deviation of the stock’s returns? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)