Investments

Question 4 (16 Marks) Consider the following realized annual returns for stock CAP Coffee from the year of 2009 to 2018: Year End 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 CAP Coffee Realized Annual Return 25.5% 16.2% 46.5% 14.5% 2.4% -1.6% -15% 17.5% -5.8% -8.5 a. Calculate the average annual return of stock CAP Coffee from 2009 to 2018. 3 marks b. Calculate the variance and standard deviation of stock CAP Coffee's return from 2009 to 2018. 8 marks c. As a fund analyst, Peter wants to use the 10-years historical average return on stock CAP Coffee to forecast the expected future return on stock CAP Coffee. What is the standard error of his estimate of the expected return? Find the 95% confidence interval for his estimate of the expect return. 5 marks Show all your calculations