Question

Jake had a stock with returns of 4%, -5%, -15%, and 16% in 2004, 2005, 2006,...

Jake had a stock with returns of 4%, -5%, -15%, and 16% in 2004, 2005, 2006, and 2007. The Avg. return of the stock for 5 years perioed 2004 – 2008 was 13%:

            A – Whats the return for year 2008?

            B – What is standard deviation for the all five years of the stock?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Let, returns be denoted by xi

Given   = 13% = 0.13

Therfore,

Hence, returns in 2008 will be 0.65 - (0.04-0.05-0.15+0.16) = 0.65

Standard deviation of the returns for all 5 years can be calculated using the STDEV.P function in Excel. We consider the data given as population rather than sample because the data set provided is the only set of data that is of interest to us. We are not interested in returns before 2004 or after 2008 or for that matter return on any other stock.

The standard deviation calculated using Excel would be 27.94%

The formula for calculating standard deviation of a population is where is the population mean and n is the number of observations.

So the answers are

A - 65%

B- 27.94%

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You have the following historical annual total returns on Terlingua Oil & Gas Exploration: Year Annual...
You have the following historical annual total returns on Terlingua Oil & Gas Exploration: Year Annual total return (%) 2001 0% 2002 -10% 2003 19% 2004 12% 2005 13% 2006 9% 2007 -4% 2008 5% 2009 2% 2010 4% Calculate the sample standard deviation of annual return.
The table below displays returns associated with a company's shares over the last 15 years. Year...
The table below displays returns associated with a company's shares over the last 15 years. Year Return (% pa) 2005 23 2006 17 2007 11 2008 15 2009 12 Year Return (% pa) 2010 31 2011 2 2012 16 2013 8 2014 31 Year Return (% pa) 2015 29 2016 5 2017 26 2018 6 2019 1 Based on this historic data, calculate the expected return on the shares and its standard deviation. Give your answers as a percentage per...
The table below displays returns associated with a company's shares over the last 15 years. Year...
The table below displays returns associated with a company's shares over the last 15 years. Year Return (% pa) 2005 9 2006 -2 2007 20 2008 -4 2009 18 Year Return (% pa) 2010 8 2011 19 2012 1 2013 13 2014 -2 Year Return (% pa) 2015 35 2016 -3 2017 28 2018 18 2019 31 Based on this historic data, calculate the expected return on the shares and its standard deviation. Give your answers as a percentage per...
You have the following historical annual total returns on Terlingua Oil & Gas Exploration: Year Annual...
You have the following historical annual total returns on Terlingua Oil & Gas Exploration: Year Annual total return (%) 2001 0% 2002 6% 2003 13% 2004 9% 2005 2% 2006 4% 2007 -1% 2008 -6% 2009 0% 2010 4% Calculate the sample standard deviation of annual return. Do not round at intermediate steps in your calculation. Express your answer in percent. Round to two decimal places. Do not type the % symbol.
question 6 You have the following historical annual total returns on Terlingua Oil & Gas Exploration:...
question 6 You have the following historical annual total returns on Terlingua Oil & Gas Exploration: Year Annual total return (%) 2001 3% 2002 -4% 2003 12% 2004 15% 2005 -2% 2006 3% 2007 17% 2008 0% 2009 -1% 2010 5% Calculate the sample standard deviation of annual return. Do not round at intermediate steps in your calculation. Express your answer in percent. Round to two decimal places. Do not type the % symbol.
A stock had returns of 15 percent, 14 percent, 18 percent, 5 percent, 16 percent, and...
A stock had returns of 15 percent, 14 percent, 18 percent, 5 percent, 16 percent, and 2 percent over the last six years. What is the arithmetic return for the stock? What is the geometric return for the stock?
Using the data in the following? table, and the fact that the correlation of A and...
Using the data in the following? table, and the fact that the correlation of A and B is 0.59?, calculate the volatility? (standard deviation) of a portfolio that is 80% invested in stock A and 20% invested in stock B.    Stock A   Stock B 2005   -7   13 2006   15   28 2007   6   15 2008   -5   -7 2009   4   -4 2010   6   34 The Standard deviation of the portfolio is ___%.
Year Stock House 2006 12% 30% 2007 5% 10% 2008 -10% -5% 2009 5% 5% 2010...
Year Stock House 2006 12% 30% 2007 5% 10% 2008 -10% -5% 2009 5% 5% 2010 7% 10% 2011 15% 15% Standard deviations are for stock and house respectively are : A. 7.66% 11.58% B. 0.66% 0.58% C. 8.66% 11.58% D. 8.66% 1.58%
A stock had returns of 4 percent, 11 percent, 16 percent, -6 percent, and -2 percent...
A stock had returns of 4 percent, 11 percent, 16 percent, -6 percent, and -2 percent for the past five years. Based on these returns, what is the approximate probability that this stock will return at least 20 percent in any one given year? A) Greater than 1 percent but less than 2.5 percent. B) Greater than 2.5 percent but less than 16 percent. C) Greater than .5 percent but less than 1 percent. D) Less than .5 percent. E)...
3.Stock W and Stock M’s annual returns are as following, calculate the average return, standard deviation...
3.Stock W and Stock M’s annual returns are as following, calculate the average return, standard deviation for Stock W, Stock M, and an equally weighted portfolio WM (i.e., 50% in W and 50% in M) with explanation. A: ϱ= -1 Year Stock W Stock M Portfolio WM 2008 40% -10% 15% 2009 -10% 40% 15% 2010 40% -10% 15% 2011 -10% 40% 15% 2012 15% 15% 15% Avg. Return Stan. Dev. B: ϱ= 0.35 Year Stock W Stock M Portfolio...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT