Consider the following annual returns of Molson Coors and International Paper: Molson International Coors Раper 6.4% 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 Molson Coors Average return Standard deviation % % Раper % % Coefficient of variation Which stock appears better? O International Paper O Molson Coors

Consider the following annual returns of Molson Coors and International Paper: Molson International Coors Раper 6.4% 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 Molson Coors Average return Standard deviation % % Раper % % Coefficient of variation Which stock appears better? O International Paper O Molson Coors

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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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.)
Consider the following information on large-company stocks for a period of years. Arithmetic Mean 12.78 3.3 Large-company stocks Inflation a. What was the arithmetic average annual return on large-company stocks in nominal terms? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What was the arithmetic average annual return on large-company stocks in real terms? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Nominal return b. Real return 12.70% 10.26 %
Consider the rate of return of stocks ABC and XYZ. Year 1 2 3 4 ABC XYZ ABC 22% 9 19 1 O ABC Ⓒ XYZ ABC XYZ Required: a. Calculate the arithmetic average return on these stocks over the sample period. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) XYZ 38% 11 19 -11 Arithmetic Average b. Which stock has greater dispersion around the mean return? c. Calculate the geometric average returns of each stock. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Expected rate of return 11.40 % 11.40 % Geometric Average Expected rate of return d. If you were equally likely to earn a return of 22%, 9%, 19%, 6%, or 1%, in each year (these are the five annual returns for stock ABC), what would be your expected rate of return? (Do not round Intermediate calculations. Round your answers to 2 decimal places.) e. What if the five possible outcomes were those of stock XYZ? (Do not round Intermediate calculations. Round your answers to 2…
How is this set-up to solve? Ford Stock I) & II) were in previous question GM stock produced the following monthly returns (January - May): 5%, 8%, -2%, 12%, and 15%. Ford stock produced the following monthly returns (January - May): 1%, 10%, 6%, 3%, and 2%. I) Calculate the average return for each stock. II) Calculate the standard deviation of monthly return for each stock. III) Calculate the correlation coefficient between GM and Ford stocks.
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).
If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company. Year 1 $ 62.18 40.30 2.35 a. High target price b. Low target price Year 2 $67.29 43.18 2.58 Year 3- $74.18 39.27 2.73 Year 4 $78.27 46.21 High price Low price EPS Earnings are expected to grow at 9 percent over the next year. 6. What is the high target stock price in one year? 32.16. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g.. b. What is the low target stock price in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. 2.890
How do i start this question? Ford stock produced the following monthly returns (January - May): 1%, 10%, 6%, 3%, and 2%. I) Calculate the average return for each stock. II) Calculate the standard deviation of monthly return for each stock.
The following are the end-of-month prices for both the Standard & Poor's 500 Index and Nike's common stock. a. Using the data in the popup window, calculate the holding-period returns for each of the months. b. Calculate the average monthly return and the standard deviation for both the S&P 500 and Nike. c. Develop a graph that shows the relationship between the Nike stock returns and the S&P 500 Index. (Show the Nike returns on the vertical axis and the S&P 500 Index returns on the horizontal axis.) d. From your graph, describe the nature of the relationship between Nike stock returns and the returns for the S&P 500 Index.
Consider a stock whose value increases across an 8-year period as shown in the table. Instructions: Round your answers to two decimal places. a. Calculate the percentage change in the value of the stock from year to year. Percent Change Year 1 2 3 4 5 6 7 8 Stock Value $80.00 92.00 107.00 128.00 145.00 250.00 400.00 670.00 % V b. Calculate the percentage change in the value of the stock across the entire 8-year period. c. Do you think this qualifies as a bubble? & % 4 V N % O Yes, because the percentage change in the stock value is positive every year. O No, because the percentage change in the stock value has not increased. O Yes, because the percentage change in the stock value has increased greatly. O No, because the percentage change in the stock value fluctuates up and down across the 8 years.
QUESTION 1 You have observed a particular stock over the past year. Monthly returns have been as follows: -7%, -7%, 11%, -8%, 0%, 2%, 2%, -5%, -1%, -2%, -4%, 11%. Using Excel, calculate the average monthly returns to the nearest hundredth of a percent (.01). The average function is =average(). QUESTION 2 You have observed a particular stock over the past year. Monthly returns have been as follows: 1%, -6%, 9%, -7%, 12%, -4% , -9%, -1%, 11%, 2%, -6%, -11%. Using Excel, calculate the standard deviation. For the standard deviation of a sample, use =stdev.s(). 7.886986 8.005207 6.680478 6.939129
You are given the returns for the following three stocks: Stock B Stock C Stock A 14.00% 14.00% -19.00% 14.00 14.00 34.00 14.00 22.00 37.00 14.00 14.00 14.00 4.00 Year 1 2 3 4 5 7.00 13.00 Calculate the arithmetic return, geometric return, and standard deviation for each stock. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Arithmetic return Standard deviation Geometric return Stock A 14.01 % 0.00 % 14.01 % Stock B 14.00 % 14.01 % Stock C 14.00 % 14.02 %
Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA= 5.0% + 1.30RM + eA RB= -2.0% + 1.6RM + eB sigmaM= 20% ; R-squareA= 0.20 ; R-squareB= 0.12 What is the standard deviation of each stock (write as percentage, rounded to 2 decimal places)?

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