3. Measuring stand-alone risk using realized (historical)data Returns eamed over a given time period are called nealiced retums. Historical data on realized returns is ohten used to estimate future results. Analysts across companies use realized stock returns to estimate the risk of a stock. Consider the case of Elue Lama Mining lne. (BLM): Five rears of reatized returns for tut are given th the following table. Remember: 1. Whilf BuM was started 40 vears ago, its common stock has been publicly traded for the oast 25 vears. 2. The returns on its equitvare calculated as arithmetic returns. 1. The historical returns for BUM for 2014 to 2018 ate: Given the preceding data, the xrerage realized ritum on Btys stock is The preceding data series fepresents Given the preceding data, the average realized return on BLM's stock is The preceding data seties represents of BLM' historical returns, Based on this conclusion, the standard deviation of BLM's historical refums is If Investors expect the averape realized retum from 2014 to 2018 on 164 's stock to continue into the future. its coefficient of variation (CV) will be