Five years of realized returns for Falcon Freight Inc. (Falcon) are given in the following table: 2016 2017 2018 2019 Stock return 16.25% 11.05% 19.50% 27.30% Also note that: 2020 8.45% 1. While Falcon was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on Falcon's equity are calculated as arithmetic returns. Given this return data, the average realized return on Falcon Freight Inc.'s stock is The preceding data series represents a sample of Falcon's historical returns. Based on this conclusion, the standard deviation of Falcon's historical returns is If investors expect the average realized return on Falcon Freight Inc.'s stock from 2016 to 2020 to continue into the future, its expected coefficient of variation (CV) is expected to equal
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- Consider the case of Blue Llama Mining Inc. (BLM): Five years of realized returns for BLM are given in the following table. Remember: 1. While BLM was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for BLM for 2014 to 2018 are: 2014 2015 2016 2017 2018 Stock return 13.75% 9.35% 16.50% 23.10% 7.15% Given the preceding data, the average realized return on BLM’s stock is _____%. The preceding data series represents (a sample / the universe / the population) of BLM’s historical returns. Based on this conclusion, the standard deviation of BLM’s historical returns is ______%. If investors expect the average realized return from 2014 to 2018 on BLM’s stock to continue into the future, its coefficient of variation (CV) will be _______.Five years of realized returns for CCC are given in the following table. Remember: 1. While CCC was started 40 years ago, its common stock has been publicly traded for the past 25 years 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for CCC for 2012 to 2015 are: 2016 2012 2013 2014 2015 Stock return 13.75% 16.50% 7.15% 9.35% 23.10% Given the preceding data, the average realized return on CCC's stock is The preceding data series represents of CCC's historical returns. Based on this conclusion, the standard deviation of CCC's historical returns is If investors expect the average realized return from 2012 to 2016 on CCC's stock to continue into the future, its coefficient of variation (CV) will beReturns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future results. Analysts across companies use realized stock returns to estimate the risk of a stock. Five years of realized returns for Falcon Freight Inc. (Falcon) are given in the following table: 2016 2017 2018 2019 2020 Stock return 25.00% 17.00% 30.00% 42.00% 13.00% Also note that: 1. While Falcon was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on Falcon's equity are calculated as arithmetic returns. Given this return data, the average realized return on Falcon Freight Inc.’s stock is . The preceding data series represents a sample of Falcon’s historical returns. Based on this conclusion, the standard deviation of Falcon’s historical returns is . If investors expect the average realized return on Falcon Freight Inc.’s stock from…
- You have found the following historical information for the Daniela Company over the past four years: Year 1 Year 2 Year 3 $ 51.60 $ 60.92 $ 70.14 3.08 Year 4 $ 63.75 3.27 2.68 2.80 Stock price EPS Earnings are expected to grow at 15 percent for the next year. Using the company's historical average PE as a benchmark, what is the target stock price one year from today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Target stock price $You have found the following historical information for the Daniela Company over the past four years: Year 2 Year 3 Stock price EPS Year 1 $ $62.12 $71.34 $65.25 52.50 2.80 2.92 3.20 3.45 Year 4 Earnings are expected to grow at 21 percent for the next year. Using the company's historical average PE as a benchmark, what is the target stock price one year from today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Target stock priceNote: Please answer this question only by typing your answers in the typing space available for this question Assume that the annual rates of return for two stocks (Reliance and Wipro) for the past 5 years are as given below: Year 2 3 4 5 Reliance 35% 11% -7% -12% 24% Wipro 28% 7% -11% 15% -5% Based on the above information answer the following questions: (a) Compute the arithmetic mean of the annual rate of return for each stock. Which stock is preferable by this measure? (b) Compute the geometric mean of the annual rate of return for each stock. Which stock is preferable by this measure? (c) Compute the standard deviation of the annual rate of return for each stock. Which stock is preferable by this measure?
- Tom Teller, Inc.'s stock has had the following annual returns over the past 5 years: +14.2%; -9.8%. +32.6%, -19.8%, and +27.9%. Using the proper method for calculating investment returns, what is the 5-year return on Meridian Manufacturing's stock?The following information is for the next three problems.. Over the last four years ending July 1, the 1-year holding periodtotal returns (i.e., annual returns) for Netflix common stock (ticker symbol NFLX) were:2020: 51.36% 2021: 5.87% 2022: -56.55% 2023: 100.11%2. Calculate the arithmetic average annual return.3. Calculate the geometric average annual return.4. Calculate the volatility (standard deviation) of the annual returns.You have found the following historical information for the Daniela Company: Stock price EPS Year 1 Year 2 Year 3 Year 4 $49.24 2.59 $67.43 $61.19 $67.07 2.65 2.82 2.81 Earnings are expected to grow at 8 percent for the next year. What is the PE ratio for each year? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Year 1 Year 2 Year 3 Year 4 What is the average PE ratio over this period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Average PE Using the company's historical average PE as a benchmark, what is the target stock price in one year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Target price
- Current price of Company X's stock is $100. The table below gives the data on end of the year prices and probabilities dependent on the state of the economy. Calculate the expected return for the stock. (E) Economy Probability End of the year price Growth .5 $130 Recession .5 $90 O a. 25% b. 10% O c. 15% O d. 20%The realized return of Talkie share and Stock M for the past 5 years are detailed below:Year Talkie Stock M2020 15% 30%2019 5% 7%2018 -5% -3%2017 2% -8%2016 9% 20% Compute the arithmetic mean and standard deviation of returns over the past 5 years for each stock?You have found the following historical information for DEF Company: Year 2 Year 3 Year 4 Year1 $47.59 $58.69 Stock Price $52.42 $56.88 $2.45 $2.68 EPS $2.97 $3.78 Earnings are expected to grow at 7 percent for the next year. Using the company's historical average PE as a benchmark, what is the target stock price in one year? Answer to two decimals.