You are given the following information concerning a stock and the market: Calcu

Question

You are given the following information concerning a stock and the market: Calculate the average return and standard deviation for the market and the stock. (Use excel to complete the problem. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Calculate the correlation between the stock and the market, as well as the stock's beta. (Use excel to complete the problem. Do not round intermediate calculations. Round your Correlation answer to 2 decimal places and Beta answer to 4 decimal places.)

Explanation / Answer

1) average return = X+Y+Z/3

average reurn for market = 18%+11%+12%-14%+37%+15%/6

=13.167

average return for stock =34%+27%+3%-21%+16%+22%/6

=13.5%

standared deviation =( (x1x-x)2+(x2-x)2)1/2

standared deviation for market = (0.18-0.13167)2+(0.11-0.13167)2+(0.12-0.13167)2+-(0.14-0.13167)2+(0.37-0.13167)2+(0.15-0.13167)2

=( 0.133884)1/2

   = 0.3659= 36.59%

standard deviation of stock =

(0.34-0.135)2+(0.27-0.135)2+(0.03-0.135)2+-(0.21-0.135)2+(0.16-0.135)2+(0.22-0.135)2

   = ( 0.111549)1/2

   = 0.333989

= 33.39%

2)

  

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.