Year | Stock X | Stock Y |
2013 | 20% | 16% |
2014 | 15% | 17% |
2015 | -10% | 20% |
2016 | 30% | 24% |
2017 | 25% | 23% |
2018 | 14% | -10% |
Total | 94% | 90% |
Average Return | 15.67% | 15.00% |
(Total / 6) |
Based on the above, Stock Y is riskier than Stock X.
The reason is that, the average return of Y is less than average return of X and both stock X and Y gives the returns in oscillating manner i.e there no upward trend or no downward trend.
Problem 2: Calculating ex-post risk measures Listed below are the annual rates of return earned on...
Problem 6-14
Historical Returns: Expected and Required Rates of Return
You have observed the following returns over time:
6. Problem 6-14 eBook Problem 6-14 Historical Returns: Expected and Required Rates of Return You have observed the following returns over time: Year Market Stock X 14% 21 -14 Stock Y 2012 2013 2014 2015 2016 12% 12% -14 2 15 -4 23 10 Assume that the risk-free rate is 3% and the market risk premium is 6%. Do not round intermediate...
Historical Returns: Expected and Required Rates of Return You have observed the following returns over time: Market Stock Y 13% 11% Year 2014 2015 2016 2017 2018 Stock X 13% 18 -15 10 -10 Assume that the risk-free rate is 7% and the market risk premium is 5%. a. What are the betas of stocks X and Y? Do not round intermediate calculations. Round your answers to two decimal places Stock X: Stock Y: b. What are the required rates...
The following data sets are annual growth rates for two products Calculate Statistics with Excel Y 2013 2014 2015 2016 2017 2018 2019 2020 5.35% 6.25% 3.06% 12.05% 14.25% 5.25% -7.35% 9.50% 7.25% 4.35% 6.95% -13.50% -14.50% 18.00% 19.50% 2.00% 20 Calculate the correlation coefficient of X and Y a (1.00000) b (0.08490) Try this Excel Formula c (0.62500) =CORREL(1127:1134,J127:J134) (0.25200)
7-20. Historical Returns: Expected and Required Rates of Return You have observed the following returns over time: Year 2011 2012 2013 2014 2015 Stock X Stock Y Market 14% 13% 12% 19 7 10 - 16 -5 -12 3 s11 20 11 15 - Assume that the risk-free rate is 4%, the market risk premium is 5%, the beta for Stock X is 1.50, and the beta for Stock Y is 0.46: a. What are the required rates of return...
20. Problem 8.20 (Realized Rates of Return) eBook Stocks A and B have the following historical returns: Year Stock A's Returns, A Stock B's Returns, rB 2013 - 23.30% - 15.50% 2014 20.10 20.00 10.00 2015 31.60 - 12.80 2016 - 2.50 2017 27.25 8.05 a. Calculate the average rate of return for stock A during the period 2013 through 2017. Round your answer to two decimal places. Calculate the average rate of return for stock B during the period...
Historical Returns: Expected and Required Rates of Return You have observed the following returns over time: Stock y 13% Market 13% Year 2014 2015 2016 2017 2018 Stock X 15% 17 -12 -4 3 2 -12 3 18 Assume that the risk-free rate is 4% and the market risk premium is 3%. a. What are the betas of Stocks X and Y? Do not round intermediate calculations. Round your answers to two decimal places. Stock X: Stock Y: b. What...
Problem #2 (9 Marks) Annual returns for CSH Fund are listed below. Year Return 2019 -19.9% 2018 16.6% 2017 18.0% 20161-50.0% 2015| 43.3% 2014 1.2% 2013|-16.5% 20121 45.6% 2011| 45.2% 2010 -3.0% a) What is the arithmetic average return over the 10-year period? (2 marks) b) What is the geometric average return over the 10-year period? (4 marks) c) If you invested $1000 at the beginning of 2010 in CSH Fund, how much would you have at the end of...
You have observed the following returns over time YearStock X Stock Y Market 2012 2013 2014 2015 2016 13% 1496 19 16 12% 10 12 20 15 Assume that the risk-free rate is 6% and the market risk premium is 5%. a. What are the betas of Stocks X and Y? Answer b. What are the required rates of return on Stocks X and Y? Answer C. What is the required rate of return on a portfolio consisting of 80%...
Historical Returns: Expected and Required Rates of Return Year You have observed the following returns over time: Stock X Stock y Market 2014 12 11 13% 2015 2016 -16 2017 10 12 2018 Assume that the risk-free rate is 5% and the market risk premium is 4% 3. What are the betas of stocks X and Y? Do not round Intermediate calculations. Round your answers to two decimal places Stock X: Stock Y: b. What are the required rates of...
Assume the risk-free rate is 4.1% and expected market return is 10.2%. Suppose that you have observed the following returns over time: Year Stock A Stock B Market 2012 5% 14% 12% 2013 7% 15% 10% 2014 -9% -17% -12% 2015 1.5% 3% 1% 2016 10% 18% 15% 2017 17.5% 24.5% 20% What are the betas of Stock A and Stock B? What are the required rate of returns of Stocks A and B? What is the required rate of...