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Saved Help Save & Exit Submit Problem 11-C Measuring Risk and Return Your investment advisor believes that recent stock returns should be given more consideration when calculating future returns and risk than older returns. The historical returns for Lately Lighthouse, Inc. are given in the table below, along with the weights that your advisor believes are appropriate. Use the corresponding weights in all calculations. Lately Stock Weight Year 2012 11.84% 5% 15% 2013 13.14% 8.30% 10.66% 7.95% 2014 20% 2015 25% 35% 2016 ces a. What is the expected return for Lately Lighthouse, Inc.? (Enter your answer as a percent rounded to two decimal places.) Expected return % b. What is the standard deviation of returns for Lately Lighthouse, Inc.? (Enter your answer as a percent rounded to two decimal places.) % Standard deviation Next < Prev 4 of 4

Answer 1

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STATS - Microsoft Excel (Product Activation Failed) Add-Ins File Home Insert Page Layout Formulas Data Review View - 2x % Cut Calibri Dr General -11AA = = = D- DA Wrap Text Merge Merge & Center - Center BI U SF $ % % , 4:0 .00 :.: Insert Delete Format Conditional Format Formatting as Table Styles Cell Styles Σ AutoSum : A Fill 2 Sort & Clear Filter Editing Find & Select Font Alignment Number Cells CL CM CN CO CP CQ E Copy Paste Format Painter Clipboard CM580 CK 580 581 582 583 584 YEAR WEIGHT VARIANCE rate of return (R) 5% 15% 585 586 2012 2013 2014 2015 2016 EXPECTED RETURN SQUARED RETURN DEVIATION (S) DEVIATION (T) P*Q (R-E(R) = R -9.5385% S*S 0.5920% 2.169500% 0.0471% 1.9710% 3.4695% 0.1204% 1.6600% -1.3705% 0.0188% 2.6650% 0.9895% 0.0098% 2.7825% -1.7205% 0.0296% 9.6705% VARIANCE 11.84% 13.14% 8.30% 10.66% 7.95% E(R) = 20% p*T 0.0024% 0.0181% 0.0038% 0.0024% 0.0104% 0.0370% 25% 35% 587 588 589 590 591 592 ANSWER EXPECTED RETURN = 9.67% [rounded to 2 decimals] 593 594 STANDARD DEVIATION = STANDARD DEVIATION = SQRT (VARIANCE) SQRT(0.0616%) 1.92% [rounded to 2 decimals] ANSWER 595 596 597 598 STANDARD DEVIATION = 599 N P EMV MEAN STDV assignment DEAR Sheet2 COV TIME SERIES corr REGRESSION range CAMERA TREND freg_MATRIX V FV DIVIDEND ferences INTERVAL, NORMAL HYPOTHIC 20J 120% Rea + 1 @ @ 9 0 5 W X H ETA DORE * 4. tO ENG 01:30 21-11-2019