Q: If the return on stock A in year 1 was 0 %, in year 2 was 8 %, in year 3 was 14 % and in year 4 was…
A: Year Annual Stock return10%28%314%44%
Q: Returns earned over a given time period are called realized returns. Historical data on realized…
A: Average return, also known as expected return, is the expected value or mean of a set of returns on…
Q: You find a certain stock that had returns of 15.2 percent, -22.6 percent, 28.6 percent, and 19,6…
A: Average is the sum of all stock returns divided by number of return. given, average =13.2% Let the…
Q: 1. If you wished to calculate a stock's 5% daily VAR using historical data. If you had 2000 data…
A: The Value at Risk: The Value at Risk (VaR) is a metric that is used to quantify the worst potential…
Q: You've observed the following returns on SkyNet Data Corporation's stock over the past five years:…
A: Average Return : Standard deviation : Standard deviation is an overall risk of a security. It is an…
Q: The sample data above represent the daily price (Adjusted Close) of Microsoft Corporation (MSFT) and…
A: Date MSFT Stock Price 05-02-2022 107.52 06-02-2022 116.51 07-02-2022 109.41 08-02-2022…
Q: The past five monthly returns for PG&E are −3.51 percent, 4.73 percent, 4.11 percent, 6.98…
A: Month Returns 1 -3.51% 2 4.73% 3 4.11% 4 6.98% 5 3.92%
Q: You’ve observed the following returns on Pine Computer’s stock over the past five years: −26.4…
A: Variable in the question: YearReturn (%)1-26.4214.6332.242.8521.8
Q: Stock prices over 5 months are observed to be $110.00, $115.00, $98.00, $107.00, and $112.00. What…
A: The annualized standard deviation for the given prices of the stock over the months can be found by…
Q: You’ve observed the following returns on Yamauchi Corporation’s stock over the past five years:…
A: A statistical measure that represents the spread among the return of the investment is term as the…
Q: You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 15…
A: a.Arithmetic average return on the company stock over this 5 year period is calculated by using…
Q: An index model regression applied to past monthly returns in Ford's stock price produces the…
A: Estimated price of Ford's Price = 0.10% + (1.10) * (9.0%) Estimated price of Ford's Price = 0.10% +…
Q: Consider the following annual returns of Molson Coors and International Paper: MolsonCoors…
A:
Q: Observed the following Corporation stock over the pa e years: -28.5 percent, 16 percent, 35 percent,…
A: The sum of all the rates of return divided by a total number of years is called Arithmetic average…
Q: The past five monthly returns for PG&E are −3.55 percent, 4.83 percent, 4.15 percent, 7.04…
A: Calculation of Standard Deviation of PG&E’s monthly return using STDEV.S function of excel:To…
Q: Using the data shown in the table below that contains historical monthly prices and dividends…
A: The average monthly return of an investment is a measure that indicates the average rate of return…
Q: ou've observed the following returns on Pine Computer's stock over the past five years: 15 percent,…
A: Standard deviation is the measure of the risk of stock and is the devaition from the mean return of…
Q: Consider the following annual returns of Molson Coors and International Paper: Molson Coors…
A: A statistical measure that represents the variation in the return on the stock is term as the…
Q: horizontal analysis by calculating the year-over-year changes in each line item,
A: Horizontal analysis: Horizontal analysis is also called a trend analysis to the analysis of the…
Q: Standard Deviation %
A: To calculate the standard deviation, first we need to calculate the mean of the monthly returns:…
Q: What is the standard deviation for a stock that has had annual returns over the last four years of…
A: Sample Annual Returns: Year Return 1 10% 2 -4% 3 8% 4 -7%
Q: The rates of return on Cherry Jalopies, Inc., stock over the last five years were 18 percent, 11…
A: Geometric return is annualized return found by taking individual return. This return is calculated…
Q: What was the arithmetic average return on the stock over this five-year period? What was the…
A: 1. Airtmetic Mean = Total Return, getting by adding all the returns of each year/ no of years…
Q: An index model regression applied to past monthly returns in Ford’s stock price produces the…
A: Stock shares or investments is one of important source of investments in business. Return of stock…
Q: 5. You've observed the following returns on Crash-n-Burn Computer's stock over the past five years:…
A: Returns 6-8291616
Q: ind a certain stock that had returns of 14.2 percent, −22.1 percent, 28.1 percent, and 19.1 percent…
A: Standard is one of the important statiscal parameter used in finance and used as measure of risk and…
Q: The following are the historic returns for the Beximco Computer company Year Beximo General index 1…
A: Calculation of correlation coefficient, standard deviation and beta of the company: Excel workings:
Q: 18.93 percent, −15.21 percent, 12.41 percent, and 25.54 percent for the past five years. What is the…
A: Variance is a measure of risk and represents degree of variability in the returns of the given…
Q: The following are the historic returns for the Chelle Computer Company: Year Chelle Computer…
A: a.Calculation of Correlation Coefficient between Chelle Computer and the General Index:To calculate…
Q: You’ve observed the following returns on Pine Computer’s stock over the past five years: 13 percent,…
A: a. You add up all the returns and divide the amount by the number of returns to get the arithmetic…
Q: (Expected return and risk) The following data represent returns for the common stocks over a…
A: Here,ProbabilityReturns of Company G0.1-20%0.28.50%0.221%0.3-18%0.24.60%
Q: You've observed the following returns on Pine Computer's stock over the past five years: -26.7…
A: Return on stock is the term used to describe the profit or loss on a stock investment over a…
Q: A security analyst has regressed the monthly returns on Exxon Mobil equity shares over the past five…
A: The given regression equation isrEM = 0.08 + 1.44 rSPBeta in the regression equation is the…
Q: Go to Yahoo! Finance and download the monthly stock prices for Apple (AAPL) from 1/1/2016 to…
A: The standard deviation of monthly returns is a statistical measure used in finance to assess the…
Q: (Expected return and risk) The following data represent returns for the common stocks over a one-…
A: In the given case, we have provided the probability and their respective rate of return of each…
Q: that an analyst has looked at a random sample of 50 companies in the S&P 500 to understand the…
A: Standard Error is standard deviation or an estimate of standard deviation of a sample used for…
Q: which stocks are undervalued or overvalued. a. Padma – 22 percent
A: Expected return from the portfolio is the weighted average of the return generated from the…
Q: You find a certain stock that had returns of 15 percent, -22 percent, 23 percent, and 10 percent for…
A: Average return = total return for total period/ total period
Q: An index model regression applied to past monthly returns in Ford’s stock price produces the…
A: Given: Market index = 10.2% Rise of ford stock = 10%
Q: a) Historical nominal returns for Coca-Cola have been 8% and -20%. The nominal returns for the…
A: “Since you have asked multiple questions, we will solve the one question for you. If you want any…
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Consider a sample of year-end prices for Alphabet, Inc. (Google) over a five year period. Google did not pay a dividend over the sample period. YEAR PRICE 2012 $578.48 2011 $604.08 2010 $531.67 2009 $343.10 2008 $562.23 2007 $511.63 Calculate the standard deviation in the returns.
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- The sample data above represent the daily price (Adjusted Close) of Microsoft Corporation (MSFT) and Apple Inc. (AAPL) for the period from February 5, 2022, through February 9, 2022. The standard deviation of MSFT’s returns is approximately A. 0.94%. B. 2.71%. C. 5.97%. D. 9.08%.Maroon provided the following data from 2013 to 2018. Year Nominal Returns(%) Inflation (%) 2013 +8.90 +3.1 2014 +10.01 +2.9 2015 +8.60 +3.8 2016 +11.99 +4.7 2017 +8.10 +2.0 2018 +15.67 +2.6 (a) What was the standard deviation of the market returns? (b) Calculate the average real returns.Using the data in the table:, a. What was the average annual return of Microsoft stock from 2005-2017? b. What was the annual volatility for Microsoft stock from 2005-2017? a. What was the average annual return of Microsoft stock from 2005-2017? The average annual return is %. (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Realized Return for the S&P 500, Microsoft, and Treasury Bills, 2005-2017 S&P 500 Realized Return Microsoft Realized Return Dividends Paid* Year End 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 S&P 500 Index 1211.92 1248.29 3.00% 4.80% 1418.30 1468.36 903.25 4.70% 1.50% 0.10% 0.10% 1115.10 1257.64 1257.61 0.00% 1426.19 0.10% 1848.36 0.00% 0.00% 2058.90 2043.94 0.00% 0.20% 2238.83 2673.61 0.80% *Total dividends paid by the 500 stocks in the portfolio, based on the number of shares of each stock in the index, adjusted until the end of the year, assuming they were…
- Returns for the Cabell's Company over the last 3 years are shown below. What's the standard deviation of Cabell's returns? (Hint: this is a historical data problem, not a probability distribution.) Return 25% Year 2019 2018 -10 2017 30 23.87% 22.97% 21.79% 25.18%You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 16 percent, –5 percent, 19 percent, 13 percent, and 10 percent. a. What was the arithmetic average return on the company’s stock over this five-year period? b-1. What was the variance of the company’s returns over this period? b-2. What was the standard deviation of the company’s returns over this period?1. The annual net income of MAC Industries since 2005 is given below. Years t (since 2005) Net Income 1 4 6 12 15 $1,500 $2,500 $2,875 $2,850 $2,250 a. Create a scatter plot that includes your curve of best fit on top of the data. You should try several functions and make your choice based on best r-squared value. b. Find the year that Net Income was at its highest point. c. What was the income in that year?
- The past five monthly returns for PG&E are −3.55 percent, 4.83 percent, 4.15 percent, 7.04 percent, and 3.96 percent. Compute the standard deviation of PG&E’s monthly returns. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Standard Deviation: _____.__%You’ve observed the following returns on Pine Computer’s stock over the past five years: −26.4 percent, 14.6 percent, 32.2 percent, 2.8 percent, and 21.8 percent. What was the arithmetic average return on the stock over this five-year period? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What was the variance of the returns over this period? Note: Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616. What was the standard deviation of the returns over this period? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.Consider the following annual returns of Molson Coors and International Paper: Molson International Раper 6.4% Coors Year 1 25.8% Year 2 -10.3 -19.4 Year 3 46.0 -0.4 Year 4 -10.7 28.5 Year 5 18.1 -13.0 Compute each stock's average return, standard deviation, and coefficient of variation. (Round your answers to 2 decimal places.) International Раper Molson Coors Average return % Standard deviation % % Coefficient of variation Which stock appears better? O International Paper O Molson Coors
- (Related to Checkpoint 7.2) (Calculating the geometric and arithmetic average rate of return) Marsh Inc. had the following end-of-year stock prices over the last five years and paid no cash dividends Time 2 Marsh $10 10 20 4 5 10 (Click on the icon in order to copy its contents into a spreadsheet) 7 a Calculate the annual rate of return for each year from the above information. b. What is the arithmetic average rate of retum earned by investing in Marsh's stock over this period? C. What is the geometric average rate of return earned by investing in Marsh's stock over this period? d. Considering the beginning and ending stock prices for the five-year period are the same, which type of average rate of return (the arithmetic or geometric) better describes the average annual rate of return earned over the period? a. The annual rate of return at the end of year 2 is%. (Round to two decimal places.) GILECompute the mean return, variance, and standard deviation of returns, and the coefficient variation of Stock y based on the returns of the 5-year period below: Stock Q Year Stock Z Year 2016 2.60% 2016 0.60% 2017 -1.50% 2017 2.50% 2018 4.20% 2018 -1.20% 2019 3.60% 2019 3.60% 2020 0.50% 2020 0.90% 1. Based on your computation, which stock are you going to choose if you have the money to invest? 2. Why did choose it?Woodpecker, Inc., stock has an annual return mean and standard deviation of 12.6 percent and 44 percent, respectively. What is the smallest expected loss in the coming month with a probability of 16.0 percent? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round the z-score value to 3 decimal places when calculating your answer. Enter your answer as a percent rounded to 2 decimal places.) Smallest expected loss %