he 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.) Time Remaining: 00:26:16 pop-up content starts Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 1 2 3 4 Return -4.5% +28.2% +11.8% +3.8%
he 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.) Time Remaining: 00:26:16 pop-up content starts Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 1 2 3 4 Return -4.5% +28.2% +11.8% +3.8%
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 17P
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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
he 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.)Time Remaining: 00:26:16
pop-up content starts
Data table
(Click on the following icon
in order to copy its contents into a spreadsheet.)
|
Year
|
1
|
2
|
3
|
4
|
|
Return
|
-4.5%
|
+28.2%
|
+11.8%
|
+3.8%
|
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