1. (20 points) Left panel shows dividends that Cathay Pacific paid during the period between 2010 and 2019; right panel shows the share prices at the year-ends (all numbers and in HKD; source: finance.yahoo.com).

1. (a) (5 points) For years 2010 to 2019, compute annual returns. To compute annual dividends, simply sum all dividends earned during a particular year.

2. (b) (5 points) Compute average arithmetic and geometric returns.

3. (c) (5 points) Compute standard deviation of returns.

4. (d) (5 points) Suppose that you plan to hold the stock for 5 years. What is annual return you expect to earn during this period?

Date Dividend 0.16 0.17 0.09 0.04 Year Price 2019 11.52 2018 11.14 2017 12.12 0.04 0.24 0.23 2016 10.20 0.23 Sep 04, 2019 Apr 02, 2019 Sep 05, 2018 Apr 03, 2018 Sep 07, 2016 Apr 06, 2016 Sep 09, 2015 Apr 08, 2015 Sep 03, 2014 Apr 02, 2014 Sep 04, 2013 Apr 02, 2013 Apr 02, 2012 Sep 07, 2011 May 11, 2011 Sep 02, 2010 May 05, 2010 2015 13.42 2014 16.90 0.09 0.14 2013 16.40 0.05 2012 14.22 0.07 2011 13.32 2010 21.35 0.30 0.16 2009 14.48 0.68 0.29 0.09