Purchase Solution

average return, variance, standard deviation and beta

Not what you're looking for?

Ask Custom Question

Data:

period company return market index return
1 9 10
2 10 11
3 11 11
4 12 12

Find for the company and the market index (show the calculations):
a. average return
b. variance
c. standard deviation
d. beta
e. the intercept and the slope of the characteristic line.

Purchase this Solution
Solution Summary

Given data, finding the average return, variance, standard deviation and beta.

Solution Preview

The average return is found by summing the values and dividing by the number of values, N.
company return: 42/4 =10.5
market index return: 44/4 = 11

The variance is found by taking the the sum of the squares of the differences between the mean and each value and dividing by N-1.

The variance for the company's returns is therefore:
(9-10.5)^2+ (10-10.5)^2+(11-10.5)^2+(12-10.5)^2 / ...

Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

View More Free Quizzes
Related BrainMass Solutions

  • Beta and Required Return for Chicago Gear

    Common stock A has an expected return of 10%, a standard deviation of future returns of 25%, and a beta of 1.25.

  • Measuring risk and rates of return

    return= 1.67% =10.%/6 variance={ΣX 2 - n(Mean) 2 }/(n-1)= 0.001265 =(0.008-6*0.0167^2)/(6-1) standard deviation of return (SD)=√Variance= 3.56% =√0.001265 These are monthly returns and standard deviation

  • CAPM

    How does the ABCs historical return compare with the return you believe to be a fair return, given the organizations systematic risk. See the table below for computing the average returns and the standard deviation for ABC Corp and the market.

  • CAPM and Beta of Stocks

    15.% / 3 Variance-= 0.0100 =0.02 / (3 - 1) Standard deviation=√Variance= 10.00% =√0.01 Step 2: Calculate Beta Stock R Correlation: Between R & Market Expected return Standard deviation

  • Modern Investment Theory II

    RETURN 14.00% 14.00% VARIANCE 0.03% 0.05% STANDARD DEVIATION 1.85% 2.13% BOTH HAVE EQUAL AVERAGE RETURNS STOCK A IS LESS RISKY AS IT HAS LOWER STANDARD DEVIATION AND VARIANCE

  • Beta & Investment

    Here, we will discuss which investment avenue in better on the basis of past return and standard deviation.// Part A The calculation of average return and standard deviation are as followed: ** See ATTACHED file ** The average return of X

  • Calculating mean, variance and standard deviation of returns

    Solutions to given problems depict the steps to find weighted beta, average return, standard deviation of returns and variance.

  • Important Information about Beta and Required Return

    25.00% 0.3 7.50% 10.00% 0.010000 0.0030000 35.00% 0.15 5.25% 20.00% 0.040000 0.0060000 Total 1.00 15.00% 0.0270000 Expected return= 15.00% Variance= 0.027000 Standard deviation=square root of Variance= 16.43% =square root of 0.027

  • Risk, Return, Diversification

    428149 Expected return and standard deviation, portfolio expected return/risk, diversification 1) Expected Return and Standard Deviation Wilson holds a two stock portfolio that invests equally in Kelvera Industries and Old Glory Insurance Company (

View More Related Solutions