Answered: Bear Stearns' stock price closed at…

Bear Stearns' stock price closed at $98, $103, $58, $29, $4 over five successive weeks. The weekly standard deviation of the stock price calculated from this sample is?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter6: Risk And Return

Section: Chapter Questions

Problem 4P: An analyst gathered daily stock returns for Feburary 1 through March 31, calculated the Fama-French...

See similar textbooks

Related questions

Q: Windsor stock has produced returns of 22.6 percent, 18.7 percent, 15.7 percent, 11.3 percent, 9.8…

A: formula of confidence interval: confidence interval=x±z×snwhere,x=meanz=z score for the…

Q: A stock had returns of 5, 14, 11, -8, and 6 percent over the past 5 years. The standard deviation…

A: mean of stock : mean x=sum of observationstotal number of observation standard deviation =∑nx-x2n-1

Q: Three years ago, Green Thumb Industries (ticker symbol: GTBIF) had a stock return of 17.11%. What is…

A: Standard deviation is the variability in the stock returns over a period of time. The standard…

Q: stors who buy stocks of Value Line Rating of 5 w s returns are systematically higher in January th…

A: Market anomalies : Market anomalies are deviations from the efficient market hypothesis in terms of…

Q: A stock has had returns of -5.32 percent, -7.58 percent, 4.68 percent, 7.7 percent, 8.98 percent,…

A: The below expression can be used to calculate geometric average return:

Q: You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 13…

Q: You’ve observed the following returns on Yamauchi Corporation’s stock over the past five years:…

A: A statistical measure that represents the spread among the return of the investment is term as the…

Q: You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 15…

A: a.Arithmetic average return on the company stock over this 5 year period is calculated by using…

Q: A value-weighted index consists of 3 stocks and stands at 6,000 at the beginning of the month. The…

A: Free float is the percent of shares which is available to the public and is not locked up. The…

Q: The stock price in KMW, Inc. is $50, $54, $56, and $48 on four consecutive days of trading. What is…

A: Price on day 1 is $50 Price on day 2 is $54 Price on day 3 is $56 Price on day 4 is $48 To Find:…

Q: Observed the following Corporation stock over the pa e years: -28.5 percent, 16 percent, 35 percent,…

A: The sum of all the rates of return divided by a total number of years is called Arithmetic average…

Q: The rates of return on Cherry Jalopies, Inc., stock over the last five years were 21 percent, 11…

A: Stocks refer to financial security which represents the ownership of a holder in the company. The…

Q: The graph below shows the rate of change of the price of a stock (in dollar share of the stock…

A: Price of stock do changes in market as period goes on due to the buying and selling in the market…

Q: GM stock produced the following monthly returns (Jan.- May): 5%, 8%. -2%, 12%and 15% Ford stock…

A: Standard deviation measures the dispersion of the data and is used to calculate the risk.…

Q: Suppose that the daily simple returns of a stock in one week were -0.4%, 0.8%, 1.3%, -1.5%, and…

A: Log returns is one of the method for calculating returns of stocks. This method assumes that the…

Q: You've observed the following returns on Yamauchi Corporation's stock over the past five years:…

A: A. The arithmetic mean of a set of numerical values is calculated by adding them together and…

Q: During the eight weeks between July 22 and September 16 2016, Facebook's weekly stock returns were…

A: The expected stock return is a difference between the initial stock price and the closing stock…

Q: A stock has had returns of −19 percent, 29 percent, 24 percent, −10.1 percent, 34.8 percent, and 27…

A: Year Return 1 -19.00% 2 29.00% 3 24.00% 4 -10.10% 5 34.80% 6 27.00%

Q: Over the past 5 years, a stock produced returns of 23 percent, -39 percent, 4 percent, and 16…

A: Calculation of average return and standard deviation: Excel workings:

Q: A stock had returns of 17.95 percent -7.35 percent, and 23.90 percent for the past three years. What…

A: Standard Deviation of Return is the variation of returns that we can expect from the mean returns of…

Q: A stock had returns of 12%, 6%, 13%, -11%, -2% over the past five years. what is the geometric…

A: Given returns of 12%, 6%, 13%, -11%, -2% over the past five years

Q: Look up the daily trading volume for the following stocks during a recent five-day period: • Merck •…

A: Rate of return of the investment is the net loss or net gain on the investment. It is expressed as a…

Q: On March 9, 2009, the Dow Jones Industrial Average reached a new low at a close of 6,847.20, which…

A: Calculate the return on stock market as follows:

Q: You own a stock that had total returns of -1.3, 14.23, 5.52, 12.72, -7.71, 17.54, 5.06 (all in…

A: The formula to calculate arithmetic average return is given below:

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

A: Calculation of Average Return, Standard Deviation and Coefficient of Variation:The average return of…

Q: which stocks are undervalued or overvalued. a. Padma – 22 percent

A: Expected return from the portfolio is the weighted average of the return generated from the…

Q: A stock has had returns of 16.72 percent, 12.20 percent, 5.90 percent, 26.86 percent, and -13.49…

A: Holding period return refers to the return on the portfolio over a period of time. Holding period…

Q: You find a certain stock that had returns of 10 percent, −17 percent, 23 percent, and 15 percent for…

A: Given: Returns = 10%, -17%, 23%, 15% Average return = 10%

Q: You’ve observed the following returns on Pine Computer’s stock over the past five years: 14 percent,…

A: Let Rn be the return in year n. R1 = 14% R2 = - 14% R3 = 16% R4 = 26% R5 = 10%

Q: A stock has had returns of 11 percent, -8 percent, 6 percent, 21 percent, 24 percent, and 16 percent…

A: The geometric return is calculated as compounded annualized return

Q: A stock has had returns of 14 percent, −18 percent, 2 percent, 33 percent, 27 percent, and 6 percent…

A: Geometric mean formula: GM =61+R1×1+R2×1+R3×1+R4×1+R5×1+R6where,Rx =returns at respective year x

Q: If the return on stock A in year 1 was 14 %, in year 2 was 19%, in year 3 was 17% and in year 4 was…

A: Financial management consists of directing, planning, organizing and controlling of financial…

Q: You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 15…

A: The provided returns are 15 percent, –6 percent, 18 percent, 14 percent and 10 percent.

Q: Allagash Corporation stock moves from $108 at the beginning of the period to $124 at the end of the…

A: In this we have to calculate holding period return using capital gains and dividend.

Q: The data below consist of the closing price of the common stock of the American Telephone and…

A: Moving average is a statistical model using which trend of a time series is found. A moving average…

Q: A stock has had returns of 16 percent, 13 percent, 6 percent, -14 percent, -6 percent, and 18…

A: Given the following information: Return 1 (R1) = 16% Return 2 (R2) = 13% Return 3 (R3) = 6% Return…

Q: The rate of return on ABC, Inc., stock over the last five years was -1.19 percent, -2.89 percent,…

A: Let Rn be the return in year n. R1 = -1.19% R2 = -2.89% R3 = 8.82% R4 = 6.3% R5 = 8.47%

Q: Estimate a stock's beta (i.e., the sensitivity of the stock's returns to the returns on the market)…

A: Every stock or asset has a risk which is arises due to possibility of the stock to not perform or…

Q: Calculate the average rate of return and standard deviation of returns (as percents) for each stock…

A: Introduction: Expected return & standard deviation are defined as statistical tools with the…

Q: Calculate the standard deviation of the returns for Goodman, Landry, and the Market Index. (Hint:…

A: Given information: The stock prices and dividends of Goodman industries, laundry incorporated and…

Q: A stock produced returns of 16 percent, 9 percent, -6 percent and 21 percent over the past four…

A: Standard Deviation refers to the variations in the actual value from that of the mean value. In…

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

A: The presentation of the ratio of the standard deviation of the project and the average return of a…

Q: You find a certain stock that had returns of 14 percent, -21 percent, 22 percent, and 11 percent for…

A: Missing Return =(Average Return * 5) - (Total returns in 4 years)

Concept explainers

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.

Question

Bear Stearns' stock price closed at $98, $103, $58, $29, $4 over five successive weeks. The weekly standard deviation of the stock price calculated from this sample is?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Calculate the mean of given stock prices as follows:

VIEW

Calculate the standard deviation as follows:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 15 percent, –6 percent, 18 percent, 14 percent, and 10 percent. a. What was the arithmetic average return on the company's stock over this five-year period? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) Average return % b-1 What was the variance of the company's stock returns over this period? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) Variance b-2 What was the standard deviation of the company's stock returns over this period? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Standard deviation %
Using the data shown in the table below that contains historical monthly prices and dividends (paid at the end of themonth) for Ford Motor Company stock (Ticker: F) from August 1994 to August 1998, compute the: a. Average monthly return over this period is --%. (Round to two decimal places.) b. Monthly volatility (or standard deviation) over this period. (Round to two decimal places.)c. compute 95% confidence interval of the estimate of the average monthly return. Date Stock Price Dividend Return 1+RtAug-94 $29.250 $0.000 Sep-94 $27.750 $0.000 -5.13% 0.949Oct-94 $29.500 $0.260 7.24% 1.072Nov-94 $27.125 $0.000 -8.05% 0.919Dec-94 $27.875 $0.000 2.76% 1.028Jan-95 $25.250 $0.260 -8.48% 0.915Feb-95 $26.125 $0.000 3.47% 1.035Mar-95 $26.875 $0.000 2.87% 1.029Apr-95 $27.125 $0.310 2.08% 1.021May-95 $29.250 $0.000 7.83% 1.078Jun-95 $29.750 $0.000…
You’ve observed the following returns on SkyNet Data Corporation’s stock over the past five years: 11 percent, –10 percent, 19 percent, 18 percent, and 10 percent. a. What was the arithmetic average return on the company's stock over this five-year period? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b-1. What was the variance of the company's returns over this period? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What was the standard deviation of the company’s returns over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 16 percent, –5 percent, 19 percent, 13 percent, and 10 percent. a. What was the arithmetic average return on the company’s stock over this five-year period? b-1. What was the variance of the company’s returns over this period? b-2. What was the standard deviation of the company’s returns over this period?
You’ve observed the following returns on Pine Computer’s stock over the past five years: 13 percent, −13 percent, 20 percent, 25 percent, and 10 percent. a. What was the arithmetic average return on the company’s stock over this five-year period? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b-1. What was the variance of the company’s returns over this period? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What was the standard deviation of the company’s returns over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Average return % b-1. Variance b-2. Standard deviation %
You find a certain stock that had returns of 14 percent, -27 percent, 19 percent, and 21 percent for four of the last five years, respectively. The average return of the stock over this period was 9.5 percent. What is the standard deviation of the stock's returns?
Downtown Industries’ common stock had returns of 5.2, 10.3, 9.3, and 9.5 percent, respectively, over the past four years. What is the standard deviation of these returns?
You find a certain stock that had returns of 16 percent, −23 percent, 24 percent, and 9 percent for four of the last five years. The average return of the stock over this period was 10.2 percent. a. What was the stock’s return for the missing year? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b. What is the standard deviation of the stock’s returns? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
A stock has had the following prices at the end of each year for the last six year : $64.10, $74.05, $67.61, $76.25, $82.70 and $93.15. Over those same six years the dividends were $0.00, $1.10, $1.25, $1.45, $1.60, and $1.75. What is the arithmetic and geometric average return for this stock?
You’ve observed the following returns on Yamauchi Corporation’s stock over the past five years: –29.7 percent, 16.8 percent, 36.6 percent, 3.9 percent, and 22.9 percent. a. What was the arithmetic average return on the stock over this five-year period? b. What was the variance of the returns over this period? c. What was the standard deviation of the returns over this period?
You’ve observed the following returns on Yamauchi Corporation’s stock over the past five years: –28.2 percent, 15.8 percent, 34.6 percent, 3.4 percent, and 22.4 percent. a. What was the arithmetic average return on the stock over this five-year 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 variance of the returns over this period? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.) c. What was the standard deviation of the returns over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
You find a certain stock that had returns of 10 percent, −17 percent, 23 percent, and 15 percent for four of the last five years. The average return of the stock over this period was 10 percent. a. What was the stock’s return for the missing year? b. What is the standard deviation of the stock’s returns?