You purchased shares of a TSX listed company at the cost of $53.40 per share at the beginning of 2017.Over the next four years, the stock had following stock prices and dividends:Year Year End Price Dividends2017$55.70$1.802018$52.40$1.902019$50.80$1.002020$57.90$1.30Calculate the following statistics: (1/1000 of one percent without % sign, e.g. 12.671, if a negativepercentage, -9.56):1)2017 percentage return:2)2018 percentage return:3)2019 percentage return:4)2020 percentage return:5)Arithmetic mean:6)Geometric mean:7)Standard deviation (sample):

Formula for percentage return is given below ,Percentage return = (total year end value - initial…

Answered: 2017 percentage return: 2018 percentage…

2017 percentage return: 2018 percentage return: 2019 percentage return: 2020 percentage return: Arithmetic mean: Geometric mean: Standard deviation (sample):

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 2MAD

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Concept explainers

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.

Question

You purchased shares of a TSX listed company at the cost of $53.40 per share at the beginning of 2017.
Over the next four years, the stock had following stock prices and dividends:
Year Year End Price Dividends
2017
$55.70
$1.80
2018
$52.40
$1.90
2019
$50.80
$1.00
2020
$57.90
$1.30
Calculate the following statistics: (1/1000 of one percent without % sign, e.g. 12.671, if a negative
percentage, -9.56):
1)
2017 percentage return:
2)
2018 percentage return:
3)
2019 percentage return:
4)
2020 percentage return:
5)
Arithmetic mean:
6)
Geometric mean:
7)
Standard deviation (sample):

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Step 1: COMPUTATION OF PERCENTAGE RETURNS FROM 2017-2020 :

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Step 2: COMPUTATION OF ARITHMETIC MEAN AND GEOMETRIC MEAN :

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Step 3: COMPUTATION OF STANDARD DEVIATION

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