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Show work/formulas The annual returns of a stock and the risk-free interest rate are given as follows: Year 2010 2011 2012 2013 2014 Stock Return

Show work/formulas

The annual returns of a stock and the risk-free interest rate are given as follows:

Year

2010

2011

2012

2013

2014

Stock Return

7%

5%

-9%

6%

15%

Rf

2%

1%

2%

0.5%

1%

  1. Calculate the arithmetic average stock return.
  2. Calculate the geometric average stock return.
  3. Calculate the standard deviation of stock returns.
  4. Calculate the risk premium of the stock.
  5. Calculate the standard deviation of the excess returns.
  6. Calculate the Sharpe ratio of the stock.

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