Question

Using the data in the table a. What was the average annual return of Microsoft stock from 2002-2014? b. What was the annual volatility for Microsoft stock from 2002-2014? Data Table Realized Return for the S&P 500, Microsoft, and Treasury Bills, 2002-2014 Microsoft S&P 500 Dividends S&P 500 Realized 1-Month Realized Return T-Bill Return Year End Index Paid* Return 2001 1148.08 - 22.1% 2002 879.82 14.53 22.0% 1.6% 2003 1111.92 20.80 28.7% 6.8% 1.0% 2004 20.98 10.9% 8.9% 1211.92 1.2% 23.15 2005 1248.29 4.9% -0.9% 3.0% 1418.30 4.8% 2006 27.16 15.8% 15.8% 1468.36 20.8% 2007 27.86 5.5% 4.7% 2008 37.0% 903.25 21.85 - 44.4% 1.5% 2009 27.19 1115.10 26.5% 60.5% 0.1% -6.5% 2010 1257.64 25.44 15.1% 0.1% 1257.60 26.59 -4.5% 2011 2.1% 0.0% 32.67 16.0% 5.8% 0.1% 2012 1426.19 2013 1848.36 39.75 32.4% 44.2% 0.0% 42.47 27.5% 2014 2058.90 13.7% 0.0% X

Answer 1

Returns Year 2002 -22.0% 6.8% 2003 8.9% 2004 2005 -0.9% 15.8% 2006 2007 20.8% -44.4% 2008 60.5% 2009 -6.5% 2010 2011 -4.5% 2012 5.8% 44.2% 2013 2014 27.5% Average annual return 8.62% =AVERAGE (B39:B51) Annual volatility 27.03% =STDEV (B39:B51)