Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help with the last 2 parts of this. Returns earned over a given time period are called realized returns. Historical data on realized

I need help with the last 2 parts of this.

image text in transcribed

image text in transcribed

image text in transcribed

Returns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future results. Analysts across companies use realized stock returns to estimate the risk of a stock. Five years of realized returns for Blue Llama Mining Inc. (Blue Llama) are given in the following table: 2012 2013 2014 2015 2016 Stock return 6.25% 4.25% 7.50% 10.50% 3.25% Also note that: 1. While Blue Llama was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on Blue Llama's equity are calculated as arithmetic returns. Also note that: 1. While Blue Llama was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on Blue Lamal acuity are calculated as arithmetic returns. 2.8537% 3.8525% Given this return data, the d 2.5524% zed return on Blue Llama Mining Inc.'s stock is 6.35% 2.1973% The preceding data series re a sample of Blue Llama's historical returns. Based on this conclusion, the standard deviation of Blue Llama's historical returns is If investors expect the average realized return on Blue Llama Mining Inc.'s stock from 2012 to 2016 to continue into the future, its expected coefficient of variation (CV) is expected to equal 1. While Blue Llama was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on Blue Llama's equity are calculated as arithmetic returns. Given this return data, the average re 0.4494 urn on Blue Llama Mining Inc.'s stock is 6.35% The preceding data series represents 0.5168 ple of Blue Llama's historical returns. Based on this conclusion, the standard deviation of Blue Llama's historical returns is 0.3775 n Blue Llama Mining Inc.'s stock from 2012 to 2016 to continue into the future, its expected coefficient 0.8314 If investors expect the average realize of variation (CV) is expected to equal Save & Continue Continue without saving

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

7. Who will use the knowledge and insights that are generated?

Answered: 1 week ago