standard deviation

Q.1.You bought a share of 3 percent preferred stock for $96.67 last year. The market price for your stock is now $98.43

What was your total return for last year? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

  Total return

[removed] %  

Q2.You’ve observed the following returns on Mary Ann Data Corporation’s stock over the past five years: 10 percent, –10 percent, 17 percent, 22 percent, and 10 percent. Suppose the average inflation rate over this period was 1.5 percent and the average T-bill rate over the period was 3.0 percent.

What was the average real risk-free rate over this time period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

  Average real risk-free rate

[removed] %  

What was the average real risk premium? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

  Average real risk premium

[removed] %  

Q3.Consider the following rates of return:

Year

Large Company

US Treasury Bill

1

   3.99 %

6.65 %

2

  14.50

4.46

3

  19.39

4.33

4

–14.29

7.34

5

–31.78

5.44

6

  37.10

6.45

Calculate the standard deviation of the returns for large-company stocks and T-bills over this period.(Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

Standard deviation

  Large company stocks

[removed] %  

  T-bills

[removed] %  

c-1

Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the arithmetic average risk premium over this period? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

  Average risk premium

[removed] %  

c-2

Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the standard deviation of the risk premium over this period? (Round your answer to 2 decimal places. (e.g., 32.16))

  Standard deviation

[removed] %  

Returns

Year

X

Y

1

13

 %

18

 %

2

27

28

3

–

20

–

25

4

8

10

5

10

19

Using the returns shown above, calculate the average returns, the variances, and the standard deviations for X and Y (Do not round intermediate calculations and round your final percentage answer to 2 decimal places. (e.g., 32.16) and variances to 5 decimal places. (e.g., 32.16161))

X

Y

  Average returns

[removed] %  

[removed] %  

  Variances

[removed]      

[removed]      

  Standard deviations

[removed] %  

[removed] %