Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Returns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future results. Analysts across

image text in transcribed

Returns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future results. Analysts across companies use realized stock returns to estimate the risk of a stock. Consider the case of Blue Llama Mining Inc. (BLM): Five years of realized returns for BLM are given in the following table. Remember While BLM was started 40 years ago, its common stock has been publicly traded for the past 25 years The returns on its equity are calculated as arithmetic returns. The historical returns for BLM for 2012 to 2015 are: Given the preceding data, the average realized return on BLM's stock is ______ The preceding data series represents _______ of BLM's historical returns. Based on this conclusion, the standard deviation of BLM's historical returns is ______. If investors expect the average realized return from 2012 to 2016 on BLM's stock to continue into the future, its coefficient of variation (CV) will be _________

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

International Corporate Finance

Authors: Mark R. Eaker, Frank J. Fabozzi, Dwight Grant

1st Edition

0030693063, 9780030693069

More Books

Students also viewed these Finance questions