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1. Over the past five years, a stock provided annual returns of 12.6 percent, 5.8 percent, 7.9 percent, -11.2 percent and -2.4 percent. What is
1. Over the past five years, a stock provided annual returns of 12.6 percent, 5.8 percent, 7.9 percent, -11.2 percent and -2.4 percent. What is the arithmetic average return? What is the geometric average return? What is the variance of these returns? What is the standard deviation of these returns? 2. Refer to Problem 1. If the risk-free rate is 2%, what is the risk premium on the stock? Note: use the arithmetic average return in your computation. 3. A company had returns of 5%, 10%, -15%, 20%, -12%, 22%, 8% in the last few years. Compute the arithmetic average return, geometric average return, variance, and standard deviation of returns. 4. Refer to Problem 3. If the risk-free rate is 2%, what is the risk premium on the stock? Note: use the arithmetic average return in your computation. Also upload your excel files showing your work
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