Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Excel Activity: Evaluating Risk and Return Bartman Industries's and Reynolds Inc.'s stock prices and dividends, along with the Winslow 5000 Index, are shown here for
Excel Activity: Evaluating Risk and Return Bartman Industries's and Reynolds Inc.'s stock prices and dividends, along with the Winslow 5000 Index, are shown here for the period 2015-2020. The Winslow 5000 data are adjusted to include dividends. The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Use a minus sign to enter negative values, if any. Download spreadsheet Evaluating Risk and Return-bfa1c9.xlsx a. Use the data to calculate annual rates of return for Bartman, Reynolds, and the Winslow 5000 Index. Then calculate each entity's average return over the 5-year period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the rate of return for 2015 because you do not have 2014 data.) Round your answers to two decimal places. a. Use the data to calculate annual rates of return for Bartman, Reynolds, and the Winslow 5000 Index. Then calculate each entity's average return over the 5-year period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the rate of return for 2015 because you do not have 2014 data.) Round your answers to two decimal places. b. Calculate the standard deviations of the returns for Bartman, Reynolds, and the Winslow 5000. (Hint: Use the sample standard deviation formula, which corresponds to the STDEV.S function in Excel.) Round your answers to two decimal places. c. Calculate the coefficients of variation for Bartman, Reynolds, and the Winslow 5000. Round your answers to two decimal places. d. Assume the risk-free rate during this time was 3%. Calculate the Sharpe ratios for Bartman, Reynolds, and the Index over this period using their average returns. Round your answers to four decimal places. d. Assume the risk-free rate during this time was 3%. Calculate the Sharpe ratios for Bartman, Reynolds, and the Index over this period using their average returns. Round your answers to four decimal places
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started