Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

keturns earned over a given time perica are called realizea returns. Histancat aata on reanized returns is orten used to estimate tutore results. Analvots across

image text in transcribed
keturns earned over a given time perica are called realizea returns. Histancat aata on reanized returns is orten used to estimate tutore results. Analvots across companies use realized stock returns to estimate the risk of a stock. Five years of realized returns for Blue Dama Mining Inc. (Blue Lama) are given in the following table: 2016 2017 2018 2019 2020 Stock retum 13.75% 9.35% 16.505 23.10% 7.15% Also note that: 1. While Blue Lama was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns an Blue Llamas equity are calculated as arithmetic returns. Given this return data, the average realized return on Blue Lama Mining Inc.'s stock is The preceding data series represents a sample of blue tama's historical retums. Based on this conclusion, the standard deviation of Blue Lama's Nistorical retums is IF investors expect the average realized return on Blue Llama Mining Instock from 2016 to 2020 to continue into the future its expected coefficient of variation is de

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 Finance questions