Use the following information to compute the standard deviation of returns:   Yearly Returns Year Return (%) 1 19 2 1 3 10 4 26 5 4

Q: he following are the monthly rates of return for Madison Cookies and for Sophie Electric during a…

A: a). Computation of average monthly rate of return (Ri)¯ for M cookies as follows: Average Return =…

Q: Based on the past 3 years’ weekly returns, we find the covariance of a firm’s return with market…

A: The covariance of firm's return with market return = 0.5 The variance of the firm's stock return =…

Q: An investor recorded the following annual returns of one of his investments. You are required to…

A: The basic purpose of investment is to earn return on the invested capital. A rational investor will…

Q: Compute the standard deviation of the five monthly returns for PG&E: 1.25 percent, −1.50 percent,…

A: Standard Deviation is a measure of risk. In other words, It measures the extent of variability of…

Q: The following are the monthly rates of return for Madison Cookies and for Sophie Electric during a…

A: a.Calculation of Average Monthly Rate of Return for each stock:The Average Monthly Rate of Return is…

Q: Use the means and standard deviations of return for MSFT and TSLA in percent per month that are…

A: Opportunity set is the set of all possible portfolios that an investor may construct from a given…

Q: Part 1 Calculate the annual returns. What was the arithmetic average annual return for stock B? 4+…

A: Arithmetic Average Return: It refers to the return on investment computed by adding the returns for…

Q: Assume that there is a positive linear correlation between the variable R (return rate in percent of…

A: Positive linear correlation:- It is the relationship between two variables where an increase in the…

Q: R

A: Formula for expected return: E(r) = R1P1 + R2P2...........RnPn Variance = p1[R1 - E(r))^2…

Q: Given the following historical returns, what is the variance? Year Return 1 7 percent 3 percent 3.…

A: Return in year 1 (R1) = 7% R2 = 3% R3 = 19% R4 = -11% R5 = -1% Let R = Average return

Q: Compute the mean return, variance, and standard deviation of returns, and the coefficient variation…

A: Formula to be used: Mean(X̄)=∑X/n Variance=∑ (X-X̄)^2)/n Standard deviation (SD)=√(∑(X-X̄)^2)/n…

Q: ​(CAPM and expected​ returns)   a.  Given the following​ holding-period returns, LOADING...  Month…

A:

Q: I. Consider a risky asset X. We suppose that the rate of return of the asset per year was observed…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Consider the following annual returns of Molson Coors and International Paper:    MolsonCoors…

A:

Q: Suppose the returns on an asset are normally distributed. The historical average annual return for…

A: The normal distribution is used for calculating the return of a continuous variable when the data is…

Q: 2. Given the following historical returns, calculate the average return and the standard deviation:…

A: standard deviation = square root of (sum of (Return-average)^2)

Q: solve for annualized log-return and annualized volatility of log returns. Last end of day value was…

A: Log Return is required for Statistical Evaluation, If we are having an Average Daily log Return…

Q: Over the past 3 years an investment returned 0.19, -0.11, and 0.07. What is the variance of returns?

A: Variance: Variance is the measure of dispersion of returns of an investment.

Q: The following table shows the one-year return distribution of Startup, Inc. Calculate: 1. The…

A: The expected return is the benefit or loss that an investor may derive from a given investment. An…

Q: Which one of the following is defined as the average compound return earned per year over a…

A: In every business, amounts are being invested for the purpose of calculating and earnings returns.…

Q: Consider the following annual returns of Molson Coors and International Paper: Molson Coors…

A: A statistical measure that represents the variation in the return on the stock is term as the…

Q: Assume the returns of a stock for the previous five years are as follows: 8%, 12%, - 4%, 9% and 14%.…

A: Thank you for posting questions. Since you have posted multiple questions, as per the guideline I am…

Q: The JCI Index showed the following Rs for a 6-year period: 11.1%, -5.2%, 20.3%, 26.7%, -12.4%, and…

A: Arithmetic return and geometric return are measures of central tendencies.

Q: What is the approximate standard deviation of returns if over the past 4 years an investment…

A: Working note:

Q: Consider the following probability distribution of returns for Alpha Corporation: Current Stock…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Over the past 4 years an investment returned 0.1, -0.12, -0.08, and 0.13. What is the standard…

A: Given information : Returns for past 4 years   Year Stock returns 1 0.1 2 -0.12 3 -0.08 4…

Q: Which one of the following best describes an arithmetic average return?

A: Arithmetic average return is the mean of all returns and hence is computed by adding all the returns…

Q: Suppose the returns on an asset are normally distributed. The historical average annual return for…

A: Here, Historical Average Annual Return is 5.7% Standard Deviation is 18.3%

Q: The expected annual returns are 15% for investment 1 and 12% for investment 2. The standard…

A: Here, Expected Annual Return of Investment 1 is 15% Expected Annual Return of Investment 2 is 12%…

Q: Over the past 4 years an investment returned 22%, -5%, -20%, and 9%. What is the standard deviation…

A: Standard Deviation is the deviation of statistical data from its mean. It is the square root of…

Q: Two investments generated the following annual returns (refer to image): a. What is the average…

A: A statistical measure that represents the variation in the return on the stock is term as the…

Q: An analyst believes that economic conditions during the next year will either be strong, normal, or…

A: Expected return =P1*R1 +P2*R2+.......+Pn*Rn where P1,P2,Pn = Probability  R1,R2,Rn =return

Q: Average Return and Standard Deviation

A: Average Return: Average return is the average of different rates at different period of times.…

Q: ased on the following information, what is the standard deviation of returns?   State of Economy…

A: Standard deviation :- A standard deviation is a statistic that determines how far a dataset deviates…

Q: Suppose the returns on an asset are normally distributed. The historical average annual return for…

A: Given: Average return µ = 6.4% Standard deviation σ = 12.4% A) Range of return at 95% will be:…

Q: A challenge we run into when forecasting future stock returns is that stock returns compound. So,…

A:

Q: Over a particular period, an asset had an average return of 5.2 percent and a standard deviation of…

A: In we have to use 95% confidence interval to get the range.

Q: Yearly Returns Year Return (%) 1 19 2 1 3 10 4 26 5 4   a. 12% b. 10.42% c. 0.87% d. 108.5%

A:

Q: Over the past 3 years an investment returned 0.15, -0.1, and 0.05. What is the variance of returns?

A: Investments are the techniques through which an individual invests or parks his/her money or funds…

Q: Macro Corporation has had the following returns for the past three years: -10 percent, 10 percent,…

A: YEAR RETURNS 1 -10% 2 10% 3 30%

Q: The last four years of returns for a stock are as follows: Year 3 4 Return - 4.3% 28.1% 12.3% 3.9%…

A: Year Return 1 -4.3% 2 28.1% 3 12.3% 4 3.9%

Q: Calculate the standard deviation for the following returns:

A: Standard Deviation: It is a measure of statistics measuring the dispersion relative to the mean.

Q: Based on the following information, what is the standard deviation of returns? Probability of State…

A: Standard Deviation measures the dispersion of a dataset from the mean. To compute the standard…

Q: Security with normally distributed returns has an annual expected return of 10% and a standard…

A: The question is based on the concept normal distribution and probability of normal distribution…

Q: Carson Inc.'s manager believes that economic conditions during the next year will be strong, normal,…

A: Computation of standard deviation:Hence, the standard deviation is 21.71%.

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.