Returns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future resu Analysts across companiess use realized stock returns to estimate the risk of a stock. Consider the case of Falcon Freight Inc. (FF): Five years of realized returns for FF are given in the following table. Remember: 1. While FF was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for FF for 2012 to 2016 are: 2012 2013 2014 2015 2016 Stock return 7.50% 5.10% 9.00% 12.60% 3.90% Given the preceding data, the average realized return on FF's stock is The preceding data series represents of FF's historical returns. Based on this conclusion, the standard deviation of FF's historical returns is If investors expect the average realized return from 2012 to 2016 on FF's stock to continue into the future, its coefficient of variation (CV) will be 1. While FF was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for FF for 2012 to 2016 are: 2012 2013 2014 2015 2016 Stock return 7.50% 5.10% 9.00% 12.60% 3.90% Given the preceding data, the average realized return on FF's stock is The preceding data series represents 15.24% of FF's histo s. Based on this conclusion, the standard deviation of FF's historical returns is 7.62% 23.62% If investors expect the average realized return from 2012 to 2016 on F o continue into the future, its coefficient of variation (CV) will be 19.05% 1. While FF was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for FF for 2012 to 2016 are: 2012 2013 2014 2015 2016 Stock return 7.50% 5.10% 9.00% 12.60% 3.90% the universe a sample Given the preceding data, the average n FF's stock is the population The preceding data series represents of FF's historical returns. Based on this conclusion, the standard deviation of FF's historical returns is If investors expect the average realized return from 2012 to 2016 on FF's stock to continue into the future, its coefficient of variation (CV) will be Consider the case of Falcon Freight Inc. (FF): Five years of realized returns for FF are given in the following table. Remember: 1. While FF was started40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for FF for 2012 to 2016 are: 2012 2013 2014 2015 2016 Stock return 7.50% 5.10% 9.00% 12.60% 3.90% Giv 0.45 preceding data, the average realized return on FF's stock is 0.83 The ing data series represents of FF's historical returns. Based on this conclusion, the standard deviation of FF's his 0.52 etuns is 0.38 If in expect the average realized return from 2012 to 2016 on FF's stock to continue into the future, its coefficient of variation (CV) will be
