Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
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Textbook Question
Chapter 10, Problem 7P
The last four years of returns for a stock are as follows:
- a. What is the average annual return?
- b. What is the variance of the stock’s returns?
- c. What is the standard deviation of the stock’s returns?
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The last four years of returns for a stock are as shown here:
a. What is the average annual return?
b. What is the variance of the stock's returns?
c. What is the standard deviation of the stock's returns?
Note: Notice that the average return and standard deviation must be entered in percentage format. The variance must be entered in decimal
format.
The last four years of returns for a stock are as shown here: E
a. What is the average annual return?
b. What is the variance of the stock's returns?
c. What is the standard deviation of the stock's returns?
Note: Notice that the average return and standard deviation must be entered in percentage format. The variance must be entered in decimal format.
.....
Data table
(Click on the icon located on the top-right corner of the data table below in order to
copy its contents into a spreadsheet.)
Year
1
2
3
4
Return
- 4.3%
+ 27.9%
+ 12.3%
+ 3.6%
The last four years of returns for a stock are as shown here:
LOADING...
.
a. What is the average annual return?
b. What is the variance of the stock's returns?
c. What is the standard deviation of the stock's returns?
Note:
Notice that the average return and standard deviation must be entered in percentage format. The variance must be entered in decimal format.
Question content area bottom
Part 1
a. What is the average annual return?
The average return is
enter your response here%.
(Round to two decimal places.)
Part 2
b. What is the variance of the stock's returns?
The variance of the returns is
enter your response here.
(Round to five decimal places.)
Part 3
c. What is the standard deviation of the stock's returns?
The standard deviation is
enter your response here%.
(Round to two decimal places.)
figure
Year: 1, 2, 3, 4
Return: -4.2%, +27.9%, +11.8%, +3.8%
Chapter 10 Solutions
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Ch. 10.1 - For an investment horizon from 1926 to 2012, which...Ch. 10.1 - For an investment horizon of just one year, which...Ch. 10.2 - Prob. 1CCCh. 10.2 - Prob. 2CCCh. 10.3 - How do we estimate the average annual return of an...Ch. 10.3 - Prob. 2CCCh. 10.4 - Prob. 1CCCh. 10.4 - Do expected returns of well-diversified large...Ch. 10.4 - Do expected returns for Individual stocks appear...Ch. 10.5 - What is the difference between common risk and...
Ch. 10.5 - Prob. 2CCCh. 10.6 - Explain why the risk premium of diversifiable risk...Ch. 10.6 - Why is the risk premium of a security determined...Ch. 10.7 - What is the market portfolio?Ch. 10.7 - Define the beta of a security.Ch. 10.8 - Prob. 1CCCh. 10.8 - Prob. 2CCCh. 10 - The figure on page informalfigure shows the...Ch. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - The last four years of returns for a stock are as...Ch. 10 - Prob. 9PCh. 10 - Prob. 10PCh. 10 - Prob. 11PCh. 10 - How does the relationship between the average...Ch. 10 - Consider two local banks. Bank A has 100 loans...Ch. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - Consider an economy with two types of firms, S and...Ch. 10 - Prob. 24PCh. 10 - Explain why the risk premium of a stock does not...Ch. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - What is an efficient portfolio?Ch. 10 - What does the beta of a stock measure?Ch. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 33PCh. 10 - Suppose the risk-free interest rate is 4%. a. i....Ch. 10 - Prob. 35PCh. 10 - Prob. 36PCh. 10 - Suppose the market risk premium is 6.5% and the...Ch. 10 - Prob. 38P
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