Directions: Compute the total returns, the average of returns, and the standard deviation of the following stocks: (1 1) 2) EGRH Inc. DMP, Ltd. AVERAGE OF RETURNS (x) YEAR AVERAGE OF RET S STOCK RETURN RICE YEA Jan-2021 P8.30 Feb-2021 P8.60 Mar-2021 P9.14 Jan-2021 P0.088 Feb-2021 P0.090 Mar-2021 PO.097 Apr-2021 P0.189 May-2021 P0.164 Jun-2021 PO.495 Apr-2021 P13.30 May-2021 P137 Jun-2021 P 0 Jul-2021 PO.280 Jul-2021 6.94 Aug-2021 PO.455 Aug-20213.70 Sep-2 P14.88 Sep-2021 P0.390 Oct-2021 P0.375 0 21 P15.30 Nov-2021 PO.325 -2021 P14.30 Dec-2021 P0.330 Dec-2021 P15.52 SD (8)= STOCK RETURN PRICE (Xi-x)2 SD (8) = (XI-X)2
Directions: Compute the total returns, the average of returns, and the standard deviation of the following stocks: (1 1) 2) EGRH Inc. DMP, Ltd. AVERAGE OF RETURNS (x) YEAR AVERAGE OF RET S STOCK RETURN RICE YEA Jan-2021 P8.30 Feb-2021 P8.60 Mar-2021 P9.14 Jan-2021 P0.088 Feb-2021 P0.090 Mar-2021 PO.097 Apr-2021 P0.189 May-2021 P0.164 Jun-2021 PO.495 Apr-2021 P13.30 May-2021 P137 Jun-2021 P 0 Jul-2021 PO.280 Jul-2021 6.94 Aug-2021 PO.455 Aug-20213.70 Sep-2 P14.88 Sep-2021 P0.390 Oct-2021 P0.375 0 21 P15.30 Nov-2021 PO.325 -2021 P14.30 Dec-2021 P0.330 Dec-2021 P15.52 SD (8)= STOCK RETURN PRICE (Xi-x)2 SD (8) = (XI-X)2
Chapter2: The Domestic And International Financial Marketplace
Section: Chapter Questions
Problem 1P
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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.
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