PRIN.OF CORPORATE FINANCE
PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
Textbook Question
Book Icon
Chapter 9, Problem 1SQ

(VAR.P and STDEV.P) Choose two well-known stocks and download the latest 61 months of adjusted prices from finance.yahoo.com. Calculate the monthly returns for each stock. Now find the variance and standard deviation of the returns for each stock by using VAR.P and STDEV.P. Annualize the variance by multiplying by 12 and the standard deviation by multiplying by the square root of 12.

Expert Solution & Answer
Check Mark
Summary Introduction

To determine: The variance and standard deviation of two stocks.

Answer to Problem 1SQ

Company AL’s variance is 0.0008497 and standard deviation is 2.91%. Company NX’s variance is 0.0014812 and standard deviation is 3.85%.

Explanation of Solution

Determine the variance and standard deviation of Company AL

Excel Spreadsheet:

PRIN.OF CORPORATE FINANCE, Chapter 9, Problem 1SQ , additional homework tip  1

PRIN.OF CORPORATE FINANCE, Chapter 9, Problem 1SQ , additional homework tip  2

Excel Workings:

PRIN.OF CORPORATE FINANCE, Chapter 9, Problem 1SQ , additional homework tip  3

PRIN.OF CORPORATE FINANCE, Chapter 9, Problem 1SQ , additional homework tip  4

Therefore the Company AL’s variance is 0.0008497 and standard deviation is 2.91%. Company NX’s variance is 0.0014812 and standard deviation is 3.85%.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Do you think moves like this could potentially backfire by reducing community access or hurting brand reputation, even if they improve financial performance in the short term? How should companies like Walgreens balance cost-cutting with maintaining customer reach?
Do you think companies like Kohl's can recover investor confidence more effectively by focusing on operational improvements, or is a broader shift in business strategy (such as digital transformation or restructuring) more likely to make an impact in the long run?
3. After discussing things with a​ bank, the family learned that they can​ (1) refinance the remaining ​$15 comma 400 amount on the vehicle 1 at 13​%, over 4​ years, (2) refinance the remaining ​$8500 loan amount on the vehicle 2 at 13​%, over 3​ years, (3) refinance the remaining ​$119 comma 900 loan amount on their home at​ 5%, over 25 ​years, and​ (4) reduce their car insurance payments by ​$30 per month. Complete the following table. ​(Round to the nearest cent as needed. Do not include the​ $ symbol in your​ answer.) Part 9Part 10Part 11Part 12Part 13Part 14 Item Current Loan Amount New Interest Rate New Term of Loan New Monthly Payment Motor vehicle 1 ​$    enter your response here    enter your response here​%    enter your response here years ​$    enter your response here Motor vehicle 2 ​$    enter your response here    enter your response here​%    enter your response here years ​$    enter your response here Home ​$    enter your response here    enter your response here​%…
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Financial Management: Theory & Practice
Finance
ISBN:9781337909730
Author:Brigham
Publisher:Cengage