Calculating returns and variability

Assignment Help Financial Management
Reference no: EM13914431

Calculating Returns and Variability [LO1] You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 7percent, -13 percent, 21 percent, 34 percent and 15 percent.

a. What was the arithmetic average return on Crash-n-Burn's stock over this five year period?

b. What was the variance of Crash-n-Burn's returns over this period? The standard deviation?

Reference no: EM13914431

Questions Cloud

Assignment work in python : Write a function interleave two pictures take the first 20 pixels from the first picture and then 20 pixels from the second picture and then the next 20 pixels from the first picture and then the next 20 pixels from the second picture and so on till ..
Estimate the annual cash flows for the brewpub project : Estimate the annual cash flows for the brewpub project. Use the "best case scenario". To do this, calculate the annual revenues and annual expenses for the 10 year project,any changes in the net working capital, and any changes to capital expenditure..
Franchising is a win-win combination : Franchising is a win-win combination; both franchisees and franchisors are guaranteed success. The main reasons small businesses fail are poor management skills on the part of owners, inadequate capital, and poor planning.
Calculate degrees of financial leverage-operating leverage : The last Gasp Water Company sells water by the gallon for a price of $.75 per gallon. Fixed costs for the company are $2,000,000 of 10% bonds on its balance sheet. Calculate the degrees of financial leverage, operating leverage, and composite leverag..
Calculating returns and variability : Calculating Returns and Variability [LO1] You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 7percent, -13 percent, 21 percent, 34 percent and 15 percent. What was the arithmetic average return on Crash-n..
How long will it take to fill an empty warehouse : A warehouse holds 1000 cubic meters of cartons. These cartons come in three sizes: little (1 cubic meter), medium,(2 cubic meters), and large(3 cubic meters). The cartons arrive at the following rates: little, every 10+10 minutes; medium, every 15 mi..
The gain or loss on retirement : Chang Industries has bonds outstanding with a par value of $221,600 and a carrying value of $235,400. If the company calls these bonds at a price of $228,000, the gain or loss on retirement is:
Calculate the net present value-comment on the acceptability : Calculate the net present value (NPV) for the following 15-year projects. Comment on the acceptability of each. Assume that the firm has a cost of capital of 9%.
Roles of homemade leverage : Define and discuss MM Proposition I with its implications, and the roles of homemade leverage and the Law of One Price in the development of the proposition.

Reviews

Write a Review

Financial Management Questions & Answers

  Delaying reduce projects coefficient of variation

The firm has a 75% chance if it invests -$1,500 a return of $500 for 7-years, and a 25% chance of returning $25 for 7-years. Calculate the effect of waiting on the project's risk, using the same data. By how much will delaying reduce the project's co..

  About direct claims is most accurate

Which of the following statements about direct claims is most accurate?

  Calculate the growth rate in dividends

You buy a share of The Ludwig Corporation stock for $20.10. You expect it to pay dividends of $1.08, $1.13, and $1.1823 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $27.49 at the end of 3 years. Calculate the growth rat..

  Consider the expectations theory

Consider the expectations theory (of the term structure) with a term premium. What is the interest rate on a 5-year bond today if the term premium for a 5-year bond is 2% and 1-year interest rates are expected to remain constant at their current leve..

  Shareholders as the annual dividend

Michael's, Inc. just paid $2.60 to its shareholders as the annual dividend. Simultaneously, the company announced that future dividends will be increasing by 5.60 percent. If you require a rate of return of 9.8 percent, how much are you willing to pa..

  The baumol-tobin cash management model

The Chen Co. has determined that its operating circumstances are quite suitable for use of the Baumol-Tobin cash management model. What is the company’s optimum cash order quantity? What is the company’s optimum average cash balance. What is the opti..

  What is the dollar amount of dividends

Lee purchased a stock one year ago for $25. The stock is now worth $30, and the total return to Lee for owning the stock was 0.36. What is the dollar amount of dividends that he received for owning the stock during the year?

  Workers themselves can invent labor-saving machinery

According to Smith, social harmony comes from economic exchanges in which people act.  Which one of the following is a role for government that Smith saw as essential? The division of labor tends to be greatest in less economically developed countrie..

  What are the floatation costs for issuing preferred share

(Cost of preferred stock) The preferred stock of Gator Industries sells for $35.08 and pays $2.71 per year in dividends. What is the cost of preferred stock financing? If Gator were to issue 525,000 more preferred shares just like the ones it current..

  Retirement-assuming annual compounding

Suppose you can save $10,000 every year for 30 years until your retirement. What interest rate do you have to earn (assuming annual compounding) to have $500,000 when you retire?

  Violation of weak form efficiency

Which among the following is a violation of weak form efficiency?

  Calculate the expected beta on the portfolio

Your portfolio is diversified. It has an expected return of 10.0% and a beta of 1.10. You want to add 500 shares of Tundra Corporation at $30 a share to your portfolio. Tundra has an expected return of 14.0% and a beta of 1.30. The total value of you..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd