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Question 1 1) You are considering investing in DDC stock. Your broker reports to you the following information on retrospective returns Ri, and the stock
Question 1 1) You are considering investing in DDC stock. Your broker reports to you the following information on retrospective returns Ri, and the stock price Pi. Year i 2017 2018 2019 2020 R; 0.30 0.20 -0.10 0.15 P $2.20 $1.80 $2.08 $2.00 a) Indicate the appropriate formula, with the values included, to compute the standard deviation of these ex-post returns, and then calculate it (NOTE: You do not have to use the table method illustrated in the lectures). b) Compute the geometric average returns. c) What is a better measure of the expected returns? d) Using the dividend growth model, find the dividend received in 2021? Question 1 1) You are considering investing in DDC stock. Your broker reports to you the following information on retrospective returns Ri, and the stock price Pi. Year i 2017 2018 2019 2020 R; 0.30 0.20 -0.10 0.15 P $2.20 $1.80 $2.08 $2.00 a) Indicate the appropriate formula, with the values included, to compute the standard deviation of these ex-post returns, and then calculate it (NOTE: You do not have to use the table method illustrated in the lectures). b) Compute the geometric average returns. c) What is a better measure of the expected returns? d) Using the dividend growth model, find the dividend received in 2021
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