Here are the percentage returns on two stocks. Digital Executive Month Cheese Fruit January February 14% 68 -3 1 March 6 4 April May 8 14 -4 2 June 6 July August -2 -4 -8 -2 a-1. Calculate the monthly variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 1 decimal places.) Executive Fruit Digital Cheese Variance Standard deviation % a-2. Which stock is the riskier if held on its own? Digital Cheese

Here are the percentage returns on two stocks. Digital Executive Month Cheese Fruit January February 14% 68 -3 1 March 6 4 April May 8 14 -4 2 June 6 July August -2 -4 -8 -2 a-1. Calculate the monthly variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 1 decimal places.) Executive Fruit Digital Cheese Variance Standard deviation % a-2. Which stock is the riskier if held on its own? Digital Cheese

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 1P: The standard deviation of stock returns for Stock A is 40%. The standard deviation of the market...

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The standard deviation of stock returns for Stock A is 40%. The standard deviation of the market return is 20%. If the correlation between Stock A and the market is 0.70, then what is Stock A’s beta?
Stock A has the following returns over the past periods. Calculate the downside risk measured by semi-variance? (answer with 4 decimal spaces) 0.0057 -0.0255 0.0621 -0.0879 -0.0983 0.0813 0.0356 -0.0015 -0.0307 0.0427 0.0297 0.0192
A stock had returns of 14.43 percent, 18.87 percent, −14.99 percent, 12.39 percent, and 25.37 percent for the past five years. What is the variance of the returns? Multiple Choice • .02393 • .00282 • .15471 • .02872 .03191
Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 27 percent, and Stock I, an international company, with an expected return of 16 percent and a standard deviation of 44 percent. The correlation between the two stocks is -0.6. What is the weight of stock D in the minimum variance portfolio? (Do not round intermediate calculations. Round your answers to 4 decimal places.)
Here are the returns on two stocks. \table[[,\table[[Digital],[Cheese]],\table[[Executive],[Fruit]]],[January,+15,+8],[February,-2,+1],[March,+4,+6],[April,+6,+16],[May,-3,+2],[June,+2,+6],[July,-1,-2],[August,-7,-1]] Required: a-1. Calculate the variance and standard deviation of each stock. a-2. Which stock is riskier if held on its own? b. Now calculate the returns in each month of a portfolio that invests an equal amount each month in the two stocks. c. Is the variance more or less than halfway between the variance of the two individual stocks? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Calculate the variance and standard deviation of each stock. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. \table[[,\table[[Digital Cheese],[Retum]],\table[[Executive Fruit],[Return]],],[Variance,,%,%
Over the past five years, a stock returned -2.73 percent, 14.66 percent, 15.19 percent, 3.43 percent, and 5.49 percent, respectively. What is the variance (as a decimal fraction) of these returns? Carry intermediate calculations to six decimals. Answer to four decimals. Your answer should look something like 0.0123, or 0.0024.
The following table shows estimates of the risk of two well-known Canadian stocks: Standard Deviation (%) R2raise to the power of 2 Beta Standard Error of Beta Sun Life Financial 25.7 0.19 0.93 0.12 Suncor Energy 26.5 0.02 0.70 0.27 What proportion of each stock’s risk was market risk, and what proportion was specific risk? What is the variance of the returns for Sun Life Financial stock? What is the specific variance? What is the confidence interval on Suncor’s beta? If the CAPM is correct, what is the expected return on Sun Life? Assume a risk-free interest rate of 4% and an expected market return of 14%. Suppose that next year, the market provides a 14% return. Knowing this, what return would you expect from Sun Life?
Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA= 5.0% + 1.30RM + eA RB= -2.0% + 1.6RM + eB sigmaM= 20% ; R-squareA= 0.20 ; R-squareB= 0.12 What is the standard deviation of each stock (write as percentage, rounded to 2 decimal places)?
You’ve observed the following returns on Pine Computer’s stock over the past five years: −26.4 percent, 14.6 percent, 32.2 percent, 2.8 percent, and 21.8 percent. What was the arithmetic average return on the stock over this five-year period? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What was the variance of the returns over this period? Note: Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616. What was the standard deviation of the returns over this period? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
A stock had returns of 17.98 percent, −5.22 percent, 20.45 percent, and 8.65 percent for the past four years. What is the variance of the returns? Multiple Choice .11626 .01352 .01622 .01802 .00623
Consider the following annual returns of Molson Coors and International Paper: MolsonCoors International Paper Year 1 16.8 % 4.6 % Year 2 − 8.5 −17.6 Year 3 37.0 −0.3 Year 4 − 7.1 26.7 Year 5 16.3 −11.2 Compute each stock’s average return, standard deviation, and coefficient of variation. (Round your answers to 2 decimal places.) Avergae Return Standard deviation Coefficient of variationWhich stock appears better?multiple choice International Paper Molson Coors
Consider the following annual returns of Estee Lauder and Lowe’s Companies: EsteeLauder Lowe’s Companies Year 1 23.4 % −6.0 % Year 2 −26.0 16.1 Year 3 17.6 4.2 Year 4 49.9 48.0 Year 5 −16.8 −19.0 Compute each stock’s average return, standard deviation, and coefficient of variation. (Round your answers to 2 decimal places.) ESTEE LAUDER. LOWES COMPANY Average return. %. % Standard deviation % % Coefficient of variation