Wowzer Inc. had the following stock returns betwe Stock Return Year 2021 2020 2019 2018 What was the stock's standard deviation over this f O 12.12% -8% 16% 17%

Q: A stock ended 2019 at $28.80 per share and paid a $1.75 dividend per share in 2021. What is the…

A: Given information:  Initial price in year 2019 (P0) = $28.80 Ending price in year 2021 (P1) = $38.80…

Q: What was the risk premium on common stock in each year? What was the average risk premium? What was…

A: Risk premium is the excess return over the risk free rate. This can be computed with the formula…

Q: Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market…

A: The risk premium is referred to as the difference between the market return and the risk-free…

Q: PLEASE EXPLAIN HOW ANSWERS WERE FOUND   Using the data in the following​ table,calculate the…

A: Here, YearStock AStock…

Q: Mithril Capital had the following six end-of-year share prices: 2015 2016 2017 2018 2019 2020 Price…

A: Given Information End of Year share Prices of Year 2015,2016,2017,2018,2019 and 2020 are…

Q: If a company has a forward (forecasted) EPS of 5.242 and a forward PE of 76.495, what is the…

A: Price Earning Ratio refers to a financial ratio that is being used in order to value a stock and…

Q: Consider a stock which realized the following historical return over the last three years: -6% in…

A: Standard deviation is the measure of risk of the rate of return of the stock and it shows the…

Q: 3. 52-Week high Low Stock SYM Div Yld % PE Vol 100s Close Net. Chg Hi Lo 70.25 47.30 Goodyear GT…

A: Listed stocks on recognise market are traded on daily basis. When market opens, it shows the all…

Q: The following stock price information has been collected for stock XYZ: Closing price End of year…

A: To solve the problem, the first step is to calculate the holding period return, which can be done…

Q: Using the data in the following table, calculate the volatility (standard deviation) of a portfolio…

A: ParticularStock AStock B2010-6%17%201120%4%20123%1%2013-1%-1%20145%-12%201515%25%

Q: Consider the following annual closing prices of stock A, value of market index (S&P 500) and…

A: The Capital Asset Pricing Model (CAPM) is a widely used financial model that establishes a…

Q: What was X-Co stock’s annual total return (ATR) for 2022 if you bought it for $20 on 1/1; received a…

A: Solution: Annual Total Return (ATR) means the rate of return earned per annum on invested money. So,…

Q: H5. A stock has had the following year-end prices and dividends: Year Price Dividend 1 $40 — 2 $55…

A: The geometric average return is the way of calculating the average rate of return on an investment…

Q: Following is the forecast of Tintin Company (FY2021 – 2023)? EPS is Earnings per Share, DPS denoted…

A: To calculate the implied growth rate, we can use the Gordon Growth Model formula:   Market Price per…

Q: The returns of ABC Company and the market are listed below Compute the beta for ABC Company stock…

A: The beta of the company measures its systematic risks with respect to the overall market and it…

Q: Assume these are the stock market and Treasury bill returns for a 5-year period: T-Bill Return Year…

A: Variables in the question:Formula used:Risk premium=Stock market return - T-bill return

Q: What is the standard deviation of returns on a stock priced today at $10 that has a 25.0%…

A: standard deviation of returns on a stock = whereR = return of stockP= probability

Q: a. Calculate the arithmetic average return for the period 2018 to 2021 to Percentage Return).

A: The average return is the basic mathematical average of a series of returns over a certain time…

Q: Assume these are the stock market and Treasury bill returns for a 5-year period: T-Bill Return Year…

A: YearStock market returnT-bill…

Q: Below are the stock returns for the past five years for Agnew Industries: Year Stock Return 2021 10%…

A: Investors look forward to earning money out of securities by trading them in the market or by…

Q: The following stock price information has been collected for stock XYZ: End of year Closing price…

A: A stock's standard deviation of returns quantifies the level of volatility or risk linked to its…

Q: Annual returns of Stock in the past 5 years are presented in the following table: Year 1 Year 2…

A: The standard deviation quantifies the degree of deviation from the expected return,  It is an…

Q: Stock A and stock C have the following historical returns: Year Stock A Return Beta Stock C Return…

A: Year Stock A Return Beta Stock C Return Beta 2017 (18%) 0.80 (14.50) 0.90…

Q: The following table shows your stock positions at the beginning of the year, the dividends that each…

A: Portfolio is the combination of debt, equity and mixed securities which is being purchased for the…

Q: What is the beta for ABC's stock. Please round to the nearest 100th (ex. X.XX) O 1.10 0.98 1.19 1.25

A: The beta is a metric of an investment portfolio's overall volatility or systematic risk relative to…

Q: You bought a stock on 1 January 2018 for $135.5 and below are the year-end price data and annual…

A: Given: Date Closing price Annual dividend 31-Dec-17 $135.50 $3.60 31-Dec-18 $138.20 $3.65…

Q: The following information is related to X corporation: X's Beta was 1.3, market in January 2020 was…

A: Beta of stock=1.3Index beginning=100Index at end=110Risk free rate=0.03

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.