stock over this five-year period?b. What was the variance of the company's returns over thisperiod? The standard deviation? 9. Calculating Returns and Variability [LO1] You'veobserved the following returns on Crash-n-Burn Computer'sstock over the past five years: 8 percent, -15 percent, 19percent, 31 percent, and 21 percent.a. What was the arithmetic average return on the company's

Arithmetic average = Sum of returns/number of years Variance = ∑(return - average)2 Standard…

9. Calculating Returns and Variability [L01] You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 8 percent, -15 percent, 19 percent, 31 percent, and 21 percent. a. What was the arithmetic average return on the company's

9. Calculating Returns and Variability [L01] You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 8 percent, -15 percent, 19 percent, 31 percent, and 21 percent. a. What was the arithmetic average return on the company's

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

stock over this five-year period?
b. What was the variance of the company's returns over this
period? The standard deviation?

9. Calculating Returns and Variability [LO1] You've
observed the following returns on Crash-n-Burn Computer's
stock over the past five years: 8 percent, -15 percent, 19
percent, 31 percent, and 21 percent.
a. What was the arithmetic average return on the company's

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B.22.
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
None
You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 17 percent, -4 percent, 20 percent, 12 percent, and 10 percent. a. What was the arithmetic average return on Crash-n-Burn's stock over this five-year period? (Round your answer to 1 decimal place. (e.g., 32.1)) Average return % b-1What was the variance of Crash-n-Burn's returns over this period? (Round your answer to 5 decimal places. (e.g., 32.16161)) Variance b-2What was the standard deviation of Crash-n-Burn's returns over this period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Standard deviation %
E. 12.11% 2. North Around, Inc. stock is expected to return 22 percent in a boom, 13 percent in a normal economy, and -15 percent in a recession. The probabilities of a boom, normal economy, and recession are 6 percent, 92 percent, and 2 percent, respectively. What is the standard deviation on the returns of this stock? A. 011387 B. 000169 C.001506 D. 045318 E. 011561
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
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9. Calculating Returns and Variability You've observed the following returns on Yamauchi Corporation's stock over the past five years: –10 percent, 24 percent, 21 percent, 11 percent, and 8 percent. LO 1 What was the arithmetic average return on the stock over this five-year period? a. b. What was the variance of the returns over this period? The standard deviation? For Problem 0 cupnose the
Calculate the correlation coefficient (PAB) for the following situation: (Round intermediate calculations and the final answer to 4 decimal place, e.g. 0.2921.) State of the economy High growth Moderate Recession Probability of occurrence 25% 20% 55% Correlation coefficient Expected return on stock A in this state 44.0% 23.0% -11.0% Expected return on stock B in this state 61.0% 31.0% -21.0%
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You've observed the following returns on Bennington Corporation's stock over the past five years: 13 percent, -8 percent, 16 percent, 16 percent, and 10 percent. Suppose the average inflation rate over this period was 1.5 percent and the average T-bill rate over the period was 5 percent. a. What was the average real risk-free rate over this time period? (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 average real risk premium? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Average real risk-free rate b. Average real risk premium % %

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