Business

FinanceQ&A LibraryYou have an investment with the following history of returns:3.30-10%a2015025%a6C4080-22%a19%a43%aa26%a10%a13%aYou believe that the history ofreturns for this investment is a good indication ofwhat toexpect going forward. What is the expected return, standard deviation of returns, and95% confidence interval for this investment?TQuestion

Asked Nov 24, 2019

1 views

I need help with this problem and want to set up for excel with formulas.

Step 1

Value of Z at the 95% Confidence Level = 1.96

Calculation of expected return, standard deviation and lower and upper limit of 95% confidence interval of the investment is as follows:

Expected return is calculated by using AVERAGE function of excel:

To open the "AVERAGE function" window - MS-Excel --> Formulas --> More Function --> Statistical --> AVERAGE.

Standard Deviation is calculated by using STDEV.S function of excel:

To open the "STDEV.S function" window - MS-Excel --> Formulas --> More Function --> Statistical --> STDEV.S.

Step 2

The result of the above ta...

Tagged in

Find answers to questions asked by student like you

Show more Q&A

Q: If a company's current stock price is $26.70 and it is likely to pay a $2.45 dividend next year. Sin...

A: Calculation of Expected Return:The expected return is 23.37%.Excel Spreadsheet:

Q: A company has an issue of preferred stock outstanding that pays a $2.30 dividend every year in perpe...

A: Hi, due to unavailability of HP10bii+ Financial calculator, we will answer this question using formu...

Q: Number 5 and 6

A: 5) The IRR is the rate where NPV equals to zero.Using the goal seek method, IRR is identified as 16....

Q: Gilmore, Inc., had equity of $145,000 at the beginning of the year. At the end of the year, the comp...

A: Internal growth rate defines the growth rate that a company may be able to gain when no outside fina...

Q: AXYZ Co's. bond has a $1,000 face value and a coupon rate of 6.2% paid annually. The firm's marginal...

A: Calculation of cost of debt after tax:Answer:Cost of debt after-tax rate is 4.03% and 4.65%, tax cut...

Q: please answer c) only Question 1. Consider a two-step binomial tree, where a stock that pays no di...

A: c.Strike Price = 106Spot or Current Price = 100Call Price = 23.73 Calculation of Price of a 2-year 1...

Q: Problem 11-13 Weight of Preferred Stock (LG11-4) FarCry Industries, a maker of telecommunication...

A: Computation of the weight of preferred stock:Hence, the weight that must be used for preferred stock...

Q: Claim Denied Insurance Company has a beta of 1.2. Assume that the risk-free rate of return is 5 per...

A: Risk free rate = 5%Market risk premium = 6%Beta = 1.2Expected return of the market = 11%

Q: What must be the price of a $2,000 bond with a 5.7% coupon rate, annual coupons, and 30 years to mat...

A: The price of a bond consists present value of all future coupon payments and the redemption payment....