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DON'T USE EXCEL MANUAL! A stock has the following year-end prices and dividends: Year ,Price, Dividend...

DON'T USE EXCEL MANUAL!

A stock has the following year-end prices and dividends:

Year ,Price, Dividend

0 $49 -

1 52.20 .75

2 57 .80

3 54 .90

4 60 .95  

Part A: What was the average return for this stock over the four years it was held?

Part B: What was the standard deviation and variance of this stock over the 4-year period?

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Homework Answers

Answer #1

Computation od Return for Each Year:

Return for Year 1 = [ [ P1 - P0 ] + D1] / P0

= Capital gain + Income / Begining price

SD & variance:

SD = Sqrt [ Variance ]

Variance = [ Sum of (X- Avg X)2 ] / no. of years

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