1. You want to calculate the average return of Aardvark Enterprises to see how the stock has performed over the past five years:

Exhibit 1: Historical Returns of Aardvark Enterprises.

Year	Return
2016	13.50%
2017	22.25%
2018	34.12%
2019	12.90%
2020	-6.15%

a. Using the historical returns above, what is the average return for Aardvark Enterprises stock?

2. You notice that stock returns fluctuate daily in the financial market making it risky to invest in stocks. You want to use standard deviation, to assess the volatility of Aardvark Enterprise stock if mean return is 15.30% and standard deviation is 12%. What is the possible return of this stock one standard deviation from the mean if the return is normally distributed? (Note: expected return = mean return 1).

3. You want to use total market return approach to estimate the rate of return on another stock which Anita wants to consider for the investment portfolio. The stock is selling for $25 and pays a dividend of $2 per share during the year. You think that because of profitable capital investment that the company is undertaken, its stock price will appreciate to $35 per share by the end of next year.

a. Calculate the dividend yield.

b. Calculate the percentage capital gain of this stock.

c. Calculate the expected total return of this stock.