The analysis of risk and the search for yield in companies is determinant for financial success. In this case, consider the stock price and dividends of the companies Power Electric Industries, Riviera Power Inc. and Nature Energy Corp. for the period from 2014 to 2019. Power Electric Industries Power Electric Industries Riviera Power Inc. Riviera Power Inc. Nature Energy Corp. Nature Energy Corp. year Year Stock price Dividends Year Stock price Dividends Year Stock price Dividends 2019 $18.5 $1.50 $38.5 $4.50 $58.5 $3.50 2018 $15.93 $1.10 $40.93 $3.10 $50.93 $2.10 2017 $10.20 $1.00 $43.20 $3.00 $53.20 $3.00 2016 $9.80 $0.90 $50.80 $2.90 $50.80 $2.90 2015 $8.50 $0.85 $48.50 $2.85 $48.50 $2.75 2014 $8.00 $0.80 $45.00 $2.80 $45.00 $2.60 4. Determine the Sharpe ratios of the companies from the average returns and a risk-free rate of 4%. 5. Develop a scatter plot showing the returns of Power Electric Industries and Reviera Power Inc. on the vertical axis and the returns of Nature Energy Corp. on the horizontal axis.
The analysis of risk and the search for yield in companies is determinant for financial success. In this case, consider the stock price and dividends of the companies Power Electric Industries, Riviera Power Inc. and Nature Energy Corp. for the period from 2014 to 2019. Power Electric Industries Power Electric Industries Riviera Power Inc. Riviera Power Inc. Nature Energy Corp. Nature Energy Corp. year Year Stock price Dividends Year Stock price Dividends Year Stock price Dividends 2019 $18.5 $1.50 $38.5 $4.50 $58.5 $3.50 2018 $15.93 $1.10 $40.93 $3.10 $50.93 $2.10 2017 $10.20 $1.00 $43.20 $3.00 $53.20 $3.00 2016 $9.80 $0.90 $50.80 $2.90 $50.80 $2.90 2015 $8.50 $0.85 $48.50 $2.85 $48.50 $2.75 2014 $8.00 $0.80 $45.00 $2.80 $45.00 $2.60 4. Determine the Sharpe ratios of the companies from the average returns and a risk-free rate of 4%. 5. Develop a scatter plot showing the returns of Power Electric Industries and Reviera Power Inc. on the vertical axis and the returns of Nature Energy Corp. on the horizontal axis.
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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Question
The analysis of risk and the search for yield in companies is determinant for financial success. In this case, consider the stock price and dividends of the companies Power Electric Industries, Riviera Power Inc. and Nature Energy Corp. for the period from 2014 to 2019.
| Power Electric Industries | Power Electric Industries | Riviera Power Inc. | Riviera Power Inc. |
Nature Energy Corp. |
Nature Energy Corp. |
|
| year | Year Stock price | Dividends | Year Stock price | Dividends | Year Stock price | Dividends |
|
2019 |
$18.5 |
$1.50 |
$38.5 |
$4.50 |
$58.5 |
$3.50 |
|
2018 |
$15.93 |
$1.10 |
$40.93 |
$3.10 |
$50.93 |
$2.10 |
|
2017 |
$10.20 |
$1.00 |
$43.20 |
$3.00 |
$53.20 |
$3.00 |
|
2016 |
$9.80 |
$0.90 |
$50.80 |
$2.90 |
$50.80 |
$2.90 |
|
2015 |
$8.50 |
$0.85 |
$48.50 |
$2.85 |
$48.50 |
$2.75 |
|
2014 |
$8.00 |
$0.80 |
$45.00 |
$2.80 |
$45.00 |
$2.60 |
4. Determine the Sharpe ratios of the companies from the average returns and a risk-free rate of 4%.
5. Develop a scatter plot showing the returns of Power Electric Industries and Reviera Power Inc. on the vertical axis and the returns of Nature Energy Corp. on the horizontal axis.
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