Calculate the standard deviation of returns over three years

Assignment Help Financial Management

Reference no: EM132064655

You are searching for a stock to add to your current portfolio. You are interested in? Blackhawks, Inc. ? but are focused on elevated risk. You only buy securities with a coefficient of variation of returns below 1.0. You have obtained the following price information and dividend information (10 points)….round to nearest one decimal place:

Year Starting Price Ending price Quarterly Dividend

1 $54.00 $66.00 $0.375

2 $66.00 $70.60 $0.500

3 $70.60 $71.54 $1.000

a. Calculate the rate of return for each? year, 1 through 3

b. Assume that each year's return is equally probable and calculate the average return over this time period.

c. Calculate the standard deviation of returns over the 3 years.

d. Based on b and c determine the coefficient of variation of returns for the security.

e. Does an investment in this stock fall within the parameters of your investment policy?

Reference no: EM132064655

Questions Cloud

Define what dominant and recessive traits are : There are two types of butterflies in the highlands of Mexico; one is orange and one is blue. Orange is dominant (B) and blue is recessive (b).

Discuss whether or not a program like this one could work : After viewing the 13 Minutes video segment, NYC Charter School's $125,000 experiment, you are ready to write a journal entry.

Define the purpose of producing behavior change : Using the health issue you identified in your epidemiological analysis (unit 2), identify at least 5 risk factors associated with your that health issue.

Write a letter to a philanthropic or grant organization : Write a letter to a philanthropic or grant organization requesting funding for your study. Describe the project in a convincing yetrealistic and way.

Calculate the standard deviation of returns over three years : Calculate the standard deviation of returns over the 3 years. Does an investment in this stock fall within the parameters of your investment policy?

Determine the internal rate of return on the investment : The limousine would bring in cash inflows of $36,000 per year, Determine the internal rate of return on the investment in the new limousine

The difference between our beliefs and our actions : Describes cognitive dissonance as the difference between our beliefs and our actions. Provide three (3) examples of cognitive dissonance.

Identical firms in every way except for capital structure : Medium Pty Ltd and Average Pty Ltd are identical firms in every way except for capital structure. What is the cost of equity for Average?

Determine the underapplied or overapplied overhead : Depreciation recorded on plant and equipment, $30,200. Determine the underapplied or overapplied overhead for the year

User Account

All Pages