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( Related to Checkpoint 8 . 3 ) ( CAPM and expected returns ) a . Given the following holding - period returns, , compute
Related to Checkpoint CAPM and expected returns
a Given the following holdingperiod returns, compute the average returns and the standard deviations for the Sugita Corporation and for the market.
rate. For simplicity, you can convert from monthly to yearly returns by multiplying the average monthly returns by
c How does Sugita's historical average return compare with the return you should expect based on the Capital Asset Pricing Model and the firm's systematic risk?
a Given the holdingperiod returns shown in the table, the average monthly return for the Sugita Corporation is : Round to three decimal places.
The standard deviation for the Sugita Corporation is
Round to two decimal places.
Given the holdingperiod returns shown in the table, the average monthly return for the market is Round to three decimal places.
The standard deviation for the market is Round to two decimal places.
b If Sugita's beta is and the riskfree rate is percent, the expected return for an investor owning Sugita is
Round to two decimal places.
The average annual historical return for Sugita is Round to two decimal places.
c How does Sugita's historical average return compare with the return you should expect based on the capital asset pricing model and the firm's systematic risk? Select from the dropdown menu.
Sugita's historical average return is
the return based on the capital asset pricing model and the firm's systematic risk.
Data table
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