Question

Assume the returns of a stock for the previous five years are as follows: 10%, 6%,...

Assume the returns of a stock for the previous five years are as follows: 10%, 6%, 5%, 9% and 10%? What is the historical standard deviation of this stock? If the returns are normally distributed, what is the range of returns expected using a 99% level of confidence? If the stock price is currently $30, what is the expected maximum and minimum price of the stock at the end of the year assuming 95% level of confidence. Assume no dividend payment will be paid during the period.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Assume the returns of a stock for the previous five years are as follows: 10%, 6%,...
Assume the returns of a stock for the previous five years are as follows: 10%, 6%, 5%, 9% and 10%? What is the historical standard deviation of this stock? If the returns are normally distributed, what is the range of returns expected using a 99% level of confidence? If the stock price is currently $30, what is the expected maximum and minimum price of the stock at the end of the year assuming 95% level of confidence. Assume no dividend...
At the time of purchase, Remington Steel Corporation cost $25 per share. The current stock price...
At the time of purchase, Remington Steel Corporation cost $25 per share. The current stock price is $29.73 per share. Over the five year holding period, Remington Steel produced the following annual returns: +8%, 0%, -2%, +7%, +5%. If the returns for Remington Steel are fairly normally distributed, and the average return is considered a reasonable predictor of future returns, within what range will the actual return fall next year at 95% confidence?
A comapny zk's five year historical returns on its stocks are as follows 12% 10% 5%...
A comapny zk's five year historical returns on its stocks are as follows 12% 10% 5% 4% and 10 % what is the standard deviation of the return of the stocks based on these past data 12.93% 6.47% 8.55% 7.29% response immediately
A comapny zk's five year historical returns on its stocks are as follows 12% 10% 5%...
A comapny zk's five year historical returns on its stocks are as follows 12% 10% 5% 4% and 10 % what is the standard deviation of the return of the stocks based on these past data 12.93% 6.47% 8.55% 7.29% response immediately please help
The annual returns on Googol's stock share for the last four years were Normally distributed and...
The annual returns on Googol's stock share for the last four years were Normally distributed and equalled: 16 %, 8 %, -17 %, and 21 %, respectively. Using this information you can say that 95 % of the time the return over one year period lies in the following range: Multiple Choice between -50.54 % and 57.61 % between -47.68 % and 54.68 % between -26.74 % and 40.74 % between -9.87 % and 23.87 %
A firm has the following annual returns for the last five years: 20% 17% 19% -40%...
A firm has the following annual returns for the last five years: 20% 17% 19% -40% 18% Please calculate the SD and the Mean of the firm for the period in question; in addition, what is the range of values that would fall within: 68% of the time 99% of the time 95% of the time      Answer: M: 6.8; SD: 26.18 -19.38 to 32.98 -71.74 to 85.34 45.56 to 59.16 Need explanation for this answer
9. You’ve observed the following returns on Barnett Corporation’s stock over the past five years: -12...
9. You’ve observed the following returns on Barnett Corporation’s stock over the past five years: -12 percent, 23 percent, 18 percent, 7 percent, and 13 percent What was the arithmetic average return on the stock over this five-year period? What was the variance of the returns over this period? The standard deviation? 10. For problem 9, suppose the average inflation rate over this period was 3.2 percent and the average T-bill rate over the period was 4.3 percent. A What...
You observe an investment that has the following historical returns: Year Return 1 -4.66% 2 0.90%...
You observe an investment that has the following historical returns: Year Return 1 -4.66% 2 0.90% 3 10.81% 4 14.17% 5 15.33% 6 9.14% 7 -28.62% 8 12.76% 9 42.87% 10 -5.67% What was the average (arithmetic mean) return over the 10 year period? What was the investment's variance over the 10 year period? What was the investment's standard deviation over the 10 year period? Assuming the 10 years of return are normally distributed and representative of future returns (big,...
(1) Assume the expected inflation rates for the next five years are as follows: Year                          Inflation...
(1) Assume the expected inflation rates for the next five years are as follows: Year                          Inflation Rate     1                                       8.0%     2                                       6.0     3                                       4.0     4                                       3.0     5                                       5.0 In Year 6 and thereafter, inflation is expected to be 3 percent. The maturity risk premium (MRP) is 0.1 percent per year to maturity for bonds with maturities greater than six months, with a maximum MRP equal to 2 percent. The real risk-free rate of return is currently...
The monthly closing stock prices (rounded to the nearest dollar) for Panera Bread Co. for the...
The monthly closing stock prices (rounded to the nearest dollar) for Panera Bread Co. for the first six months of 2010 are reported in the following table. [You may find it useful to reference the t table.] Months Closing Stock Price January 90, February 95, March 96, April 99, May 91, June 93 a. Calculate the sample mean and the sample standard deviation. b. Calculate the 95% confidence interval for the mean stock price of Panera Bread Co., assuming that...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT