Enter your name in this box Demik Pride 3 4 5 Tutorial 12 - Stock Returns and Mariance 6 7 Estimating stock retums, vanance and standard deviation 8 9 Problem 1: You bought 100 shares of Starbucks Corp. (SBUX7 years ago (LAug 195) for $5.00 per share and sold the 100 shares today for $2031 each. What are your retums? At the same time your sister bought 100 shares of Coca Cola (KO) How did your retums compare (excluding brokerage fees)? Assume today is July 1, 2002 and Coke paid cumulative 10 dividends of $194. 11 12 13 Data: Monthly Closing Prices From March 1995 to July 2002 for Coca-Cola and Starbucks. 14 A Step 1. Capital Appreciation 20 31 5 Price you received today Price you paid Difference 100 shares 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Date Jul 02 3-Jun-02 1-May-02 1-Apr-02 1-Mar-02 1-Feb-02 Jan-02 3-Dec-01 1-Nov.01 1 Oct-01 4-Sep-01 1-Aug-01 2. Jul 01 1 Jun 01 4943 56.00 5.35 55.30 52107 4702 43.41 46.78 46.59 47.33 46.31 48.11 44.08 4448 SBUN 20.31 24.85 24.28 22.82 23.13 23.01 23.77 19.05 12.72 17.12 14.94 16.87 18.04 23.00 In 1995 you spent $500 for 100 shares of SBUX. Today. when you sold them your capital appreciation is valued at B At the same time your sister bought 100 shares of Coca Cola. What was her stock's capital appreciation? K 2 Enter your name in this box Demick Pride 5 Tutorial 12 - Stock Returns and Variance 6 7 Estimating stock retums, variance and standard deviation 8 9 Problem 1: You bought 100 shares of Starbucks Corp. (SBUX) 7 years ago (1 Aug "95) for $5.00 per share and sold the 100 shares today for $20 31 each. What are your retums? At the same time your sister bought 100 shares of Coca Cola (KO. How did your retums compare (excluding brokerage fees)? Assume today is July 1, 2002 and Coke paid cumulative 10 dividends of $4.94. 11 12 13 Data: Monthly Closing Prices From March 1995 to July 2002 for Coca-Cola and Starbucks. 14 A Step 1: Capital Appreciation A 20.31 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Jul-02 3. Jun 02 1 May 02 1-Apr-02 1-Mar-02 1 Feb-02 2 Jan 02 3-Dec 01 L.Nov.01 1-Oct-01 4. Sep 01 1-Aug-01 KO 49.43 56.00 $5135 5.30 02.07 47.02 43.41 46.78 46.59 47.93 46.31 811 SBUX 20.31 24.85 24.28 22.182 23.13 23101 23.72 19.05 17.72 17.12 14.94 16.87 Price you received today Price you paid Difference 100 shares 15131 S531 In 1995 you spent $500 for 100 shares of SBUX Today, when you seld them your capital appreciation is valued at 1031 BE 29 At the same time your sister bought 100 shares of A Step Capital Appreciation 20.31 Price you received today Pnce you paid Difference 100 shares 15.31 S 1,531 In 1995 you spent $500 for 100 shares of SBUX. Today when you sold them your capital appreciation is valued at 1031 Date 1-Jul-02 3 Jun 02 1-May-02 1-Apr-02 1 Mar-02 1-Feb-02 2-Jan-02 3-Dec-01 1 Nov.01 1-Oct-01 4-Sep-01 1-Aug-01 2-Jul 01 1 Jun 01 1-May.ol 2Apr-01 1-Mar 01 1 Feb-01 2-Jan-01 1 Dec.00 1-Nov.00 2 Oct-00 Sep.00 1-Aug-00 3-Jul-00 1 Jun 00 1 May.00 3-Apr 00 1 Mar-00 Feb-00 3 Jan 00 1-Dec-99 49.43 56.00 $5.35 35.30 $2.07 47102 43.41 16.78 4659 47.33 4631 18.11 44.08 44.48 46.62 4548 44.46 $2.02 56 90 59.78 6144 09.06 5393 1.33 59.79 56.01 51.88 At the same time your sister bought 100 shares of Coca Cola. What was her stock's capital appreciation? SBUN 0.31 24.85 24.28 2282 23.13 23.01 23.27 19.05 17.22 17.12 14.94 16.87 18/04 23.00 19:52 1935 21 22 23.81 24 92 22.12 22.78 2234 20103 18.31 18170 19.09 17.00 15.12 22.41 17:56 16.00 12.12 Pnce she received today 4943 Price she paid 29.75 Datteretice 1968 100 shares S 1968 Today, when she sold them, het capital appreciation is valued at 1968 Step 2 Dividends Dividends are given Dividetids per Share of SBUX 100 Sliares Div cattongs from SBUX 19.95 S ALOZ 4709 55.62 36.41 BA Dividends per share of KO 4.94 SBUX cost (price X 100) SBUX capital appreciation SBUX dividends SBUX cap. app. + div. Total retum = (CAD)cost S 1531 $ S 1531 KO.cost (pnice X 100) KO capital appreciation S 11968 KO dividends (54.94 per share) S 494 KO.cap. app. + div. S 2,462 Total retum=(CAD) Xeost 1-Jun-99 3-May-99 1-Apr-99 1-Mar-90 1-Feb-99 4 Jan 90 1 Dec.98 2 Nov.98 1-Oct-98 1 Sep.98 3-Aug 98 1 Jul 98 1-Jun-98 1-May-98 1-Apr-98 2 Mar-98 2 Feb 98 2 Jan 98 Dec-97 3 Nov 92 1-Oct-97 2 Sep 97 L-Aug-97 1 Jul 97 2-Jun-97 1-May-97 L-Apr-27 3-Mar-92 3 Feb.97 2. Jan-97 2-Dec-96 1-NOV.96 59.72 65.82 65.40 58.98 6112 62.60 6422 671 6462 55.12 62.14 16.81 81.58 74 61 72026 73.75 65.22 6154 6338 5940 53.70 57.85 5120 6539 60.33 61.6 6002 52.63 37 46 24.02 19.07 48.16 18.78 18. 18:42 14.03 1322 13.02 14.03 1153 10.84 9.03 7.89 10:47 13.36 12.00 12.03 1133 9 89 9.14 9.59 8.72 8.25 10.45 10.25 10923 9.73 2.88 7:47 41 8.11 8,56 7.16 866 For the 6 years and 11 months you and your sister held your stocks your stock retum was and your Sister's was Step 4 One Xsar Total Retum Percentage S 2,031 S 1,8011 SBUX price on Jul 02*100 SBUX price on Jul 01 100 SBUX dividends capital appreciation SBUX cap, appaldiv. TRCADprice Juli KO price on Jul 02100 Knice on 9.14 9.59 Step 4 One Year Total Retum Percentage A. S 2031 S 1804 61.54 63.38 59.40 53.70 57.85 34.22 65.39 6433 61.67 60.07 52.63 57.46 54.52 49.57 48.16 47.45 47.81 46.87 43 94 16.93 SBUX price on Jul 02-100 SBUX price on Jul 01 100 SBUX dividends capital appreciation SBUX cap. app. div. TR= (CAD/pnice Jul01 2 Van-98 1-Dec-97 3-Nov-97 1-Oct-97 2-Sep-97 1-Aug-97 1-Jul-97 2 Jun-97 1-May-97 1-Apr-97 3-Mar-97 3-Feb-97 2 Jan.97 2-Dec-96 1-Nov.96 1-Oct-96 3-Sep-96 1-Aug-96 1 Jul 96 3-Jun-96 1-May.96 1 Apr-96 1-Mar.96 L-Feb 96 2. Jan-96 1-Dec-95 1-NOV 95 2-Oct-95 1-Sep-95 1-Aug-95 B 8.72 8.25 10.45 10125 10.23 9.75 2.88 7.47 2:41 8.41 8:56 7.16 8.66 8.12 8.25 8.19 6.50 1106 6.78 6.78 0.83 4.41 4.19 0.25 3.28 4.91 4.78 5 SBUN Ko pnce on Jul 02 100 KO price on Jul 01*100 KO dividends (76 per sh) capital appreciation KO cap. app. div TR-(CA+D/price Jul01 Question 1 Which stock did better over the holding period? 43.01 38.10 38.68 37.63 5.13 34.60 B3130 33.40 06 29.25 RO Question. Which istock did better over the last year? Question you surprised