Bear Stearns' stock price closed at $99, $104, $58, $31, $4 over five successive weeks. The weekly standard deviation of the stock price calculated from this sample is: A. $49.58 B. $34.49 C. $43.11 D. $30.18

Bear Stearns' stock price closed at $99, $104, $58, $31, $4 over five successive weeks. The weekly standard deviation of the stock price calculated from this sample is: A. $49.58 B. $34.49 C. $43.11 D. $30.18

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: A 5-year 6% coupon semiannual bond was issued last year, Today, the yield rises for this type of bo-…

A: In bonds there are annual periodic interest payments and par value is paid on maturity and price of…

Q: Thessal Inc. is worth $58.66. It has a growth rate of 2.24% and a discount rate of 15.4%. What is…

A: According to the Dividend Discount Model, the current stock price is

Q: On July 1, 2023, DDJ Limited issued bonds with a face value of $900,000 due in 20 years, paying…

A: Bonds are issued below the face value than this is dicount and this is due to the higher interest in…

Q: A firm's bonds have a maturity of 10 years, with a $1000 face value, a 9% annual coupon, are…

A: Par value of bonds, FV = $1000Coupon rate = 9%Years to Maturity, NPER = 10 YearsCurrent Price, PV =…

Q: ou buy a house of $800,000 today. You put a down payment of 20% and borrow a fixed-rate mortgage of…

A: Mortgage loans are taken with the purchase of home and they are paid in equal monthly installments…

Q: An investor purchases a zero coupon bond with 17 years to maturity at a price of $430.93. The bond…

A: A bond is a financial instrument that represents a loan made by an investor to a borrower, typically…

Q: Consider two possible investments whose payoffs are completely independent of one another. Both…

A: from the given information in questionwe have to consider two possible investments whose pay offs…

Q: ABC borrows $12,875 at a subsidized rate of 3.9% to invest in a project. The project lasts for 11…

A: NPV is a time value based capital budgeting method that can be calculated as the difference between…

Q: All of the following statements are true concerning the conversion of governmental funds to…

A: Government funds are a category of funds used in governmental accounting to track and manage public…

Q: Company US Bank PepsiCo JDS Uniphase Duke Energy Shares 400 300 700 300 Beginning of Year Price…

A: Portfolio return:Portfolio return refers to the overall performance of a portfolio of assets, such…

Q: Bond value and time-Constant required returns Pecos Manufacturing has just issued a 15-year, 12%…

A: Bonds are debt instruments issued by companies. The company which issues bonds pays coupons or…

Q: Starting next year, you will need $5,000 annually for 4 years to complete your education. (One year…

A: An annuity is a method of fulfilling a financial goal for a specified period of time at a defined…

Q: The market maker offers the following bids and asks with respective depths: Price Depth Bid 95 Bid…

A: Weighted Average Execution Price (WAEP) is used to calculate the average price at which a large…

Q: Assume Highline Company has just paid an annual dividend of $1.07. Analysts are predicting an 11.6%…

A: Current dividend = d0 = $1.07Growth rate for next 5 year = g5 = 11.6%Growth rate after 5 year = g =…

Q: Suppose the share price of a certain stock is €22 today and that it will either be €26 or €16 in six…

A: To hedge the risk on a call option, you need to create a portfolio that replicates the payoff of the…

Q: bond with a coupon rate of 9 percent sells at a yield to maturity of 10 percent. If the bond matures…

A: Duration of a bond is the weighted period of the bond that requires all cash flows from the bond and…

Q: Suppose that Ally Financial Inc. issued a bond with 10 years until maturity, a face value of $1,000,…

A: Bond price can be determined by adding the present value of the future cash flows and the present…

Q: 3M stock started the year at $146, and by the end of the year had increased to $174. 3M also paid $7…

A: The total gain and loss from selling a stock with respect to the price of buying a stock is known as…

Q: Donna just graduated from college. Since she is starting her own business, it's time to upgrade from…

A: The simple payback period refers to the time it takes for the cash flows of the project to cover its…

Q: Find the finance charges on a 5 percent, 18-month, $1,000, single-payment loan when interest is…

A: We need to use simple interest method formula to calculate interest on loan.Simple interest…

Q: Compute the annual tracking error from the following information: Quarter Portfolio A's Portfolio…

A: Variables in the question: QuarterPortfolio A's ReturnPortfolio B's…

Q: Pearl Limited is considering upgrading its plant to expand it client base. The financial details of…

A: NPV stands for "Net Present Value." It is a financial metric used to evaluate the profitability of…

Q: Given a 5 percent interest rate, compute the year 6 future value of deposits made in years 1, 2, 3,…

A: The TMV concept states that the worth of the amount deposited today will be more than the worth of…

Q: Crossfade Corp. has a bond with a par value of $2,000 that sells for $1,956.84. The bond has a…

A: The yield to maturity of the bond is the expected return of an investor of the bond which is…

Q: Last year Thomson Inc's earnings per share were $3.50, and its growth rate during the prior 5 years…

A: Earnings per share are the earnings available for each equity shareholder. The earnings per share…

Q: Discuss The Diverse applications of Linear Programming in the following industries: a. logistics…

A: Linear programming (LP) is a powerful mathematical technique used for optimization, finding the best…

Q: Explain what a first-to-default credit default swap is. Does its value increase or decrease as the…

A: A First-to-Default Credit Default Swap (FTD CDS) is a financial derivative instrument used in the…

Q: You are taking out a single-payment loan that uses the simple interest method to compute the finance…

A: Amount of Loan = $10,000Interest Rate (annual) = 6% = 0.06 (as a decimal)Term of Loan = 2 yearsThe…

Q: Consider a portfolio manager with a $20,500,000 equity portfolio under management. The manager…

A: Variables in the question:Portfolio value = $20,500,000Portfolio beta = 1.25Future price =…

Q: Calculating NAV A fund has a market value of securities of $860 million, cash and receivables of $29…

A: Market Value of Securities = s = $860 millionCash and Receivables = cr = $29 millionCurrent…

Q: Gifts For All has projected sales for next year of: Q1 Q2 Q3 Q4 Sales S 26,000 S $23,473 $20,640…

A: The accounts payable period is the number of days it takes for a company to pay its supplies. Here,…

Q: Each of the three independent situations below describes a finance lease in which annual lease…

A: Lease payments:Lease payments refer to the regular monetary installments made by a lessee to a…

Q: What is the ROE for a firm with a times interest earned ratio of 2, a tax liability of $1 million,…

A: Variables in the question:Times interest earned ratio=2Tax liability=$1 millionInterest…

Q: Required information [The following information applies to the questions displayed below.] A pension…

A: The Sharpe ratio calculates performance adjusted for risk by dividing the extra profit earned on a…

Q: What is the profitability index for the following set of cash flows if the relevant discount rate is…

A: Capital budgeting is a method of determining the profitability of the project depending upon the…

Q: Steffi Derr expects to invest $5,000 annually that will earn 10%. How many annual investments must…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: $3,600. What is the cost to the insurance company for the loss?

A: In a 70/30 medical insurance policy, 70% of the cost after the deductible will be paid by the…

Q: Excel Online Structured Activity: Required annuity payments Your father is 50 years old and will…

A: One need to have planning for the retirment and if done on time will have good happy retirement life…

Q: You make $9,000 annual deposits for the next 9 years into a savings account that earns 10.21%…

A: To calculate the future value of your savings account, you can use the formula for compound…

Q: Joseph and three other friends bought a $270,000 house close to the university at the end of August…

A: A mortgage refers to a covered loan that is borrowed for the purchase of a property which itself…

Q: On April 1, 2024, Antonio purchased appliances from the Acme Appliance Company for $1,300. In order…

A: Purchased Amount = $1,300Time Period = 18 MonthsAnnual Interest Rate = 24%

Q: our broker has developed a list of firms, their betas, and the return he expects the stock to yield…

A: Capital Asset Pricing Model (CAPM) is an alternative model to find out the cost of equity or the…

Q: Three equal payments were made one, two, and three years after the date on which a $17,200 loan was…

A: Loans are paid by equal payment and these payments carry the payment for interest and as well as…

Q: Kurt has 25/50/20 auto insurance coverage. One evening he lost control of his vehicle, hitting a…

A: Let us first determine what the given numbers mean.The first number is 25 and means that Kurt will…

Q: + A permanent steel building used for the overhaul of dewatering systems (engines, pumps, and…

A: from the information given in question we have to answer the MACRS property class of permanent steel…

Q: A firm has two classes of securities: long-term bonds and common stock. The bonds have 16 years to…

A: Value of debt = d = $749 millionNumber of Stock = n = 31 millionMarket price of stock = ps = $26

Q: Lagace Ltd. entered into a lease on June 1, 2020. The lease term is six years and requires annual…

A: The concept of "capitalized amount" refers to the total value assigned to an asset or expense when…

Q: Stock A has a volatility of 54% and a correlation of 19% with your current portfolio. Stock B has a…

A: Stock A has a volatility of 54% and a correlation of 19%.Stock B has a volatility of 37% and a…

Q: Cameron's Putts Inc. has 6.2 percent coupon bonds outstanding with a current market price of $704.…

A: Bonds are debt instruments issued by corporations, municipalities, and governments to raise capital.…

Q: You Save Bank has aunique account. If you deposit $9,000 today, the bank will pay you an annual…

A: FV = A*(1+r)nwhereFV = future valueA = amount investedr = interest raten =time period

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 $99, $104, $58, $31, $4 over five successive weeks. The weekly standard deviation of the stock
price calculated from this sample is:
A. $49.58
B. $34.49
C. $43.11
D. $30.18

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

Step 1: Solution

Step 2: Solution

Step 3: Solution

Step 4: Solution

Solution

Trending now

This is a popular solution!

Step by step

Solved in 5 steps with 5 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

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?
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 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’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?
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?
During the last four years, ADL Co. had the following stock prices at the end of each year (starting with the earliest year): $63, $55, $65, and $63. Estimate semi-variance of company returns. Group of answer choices 4 48 67 99
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? pls type in computer!
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?
Based on five years of monthly data, you derive the following information forthe companies listed: Company SDi rm Padma 11.10% 0.82 Meghna 12.60% 0.63 Jamuna 6.60% 0.45 Karnafully 9.70% 0.70 SD on Market 7.60% 1.00 Compute the beta coefficient for each stock.
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.)