Use the following information to answer Questions 37 - 40. Hacker Corporation\'s
ID: 2725811 • Letter: U
Question
Use the following information to answer Questions 37 - 40.
Hacker Corporation's stock produced returns of 22%, 14%, and -11% over three of the past four years. The arithmetic average for the past four years is 12.5%. What is the standard deviation of the stock's returns for the 4-year period?
14.29%
16.34%
17.08%
15.25%
2 points
QUESTION 38
Suppose the current T-bill rate is 0.15%. What is the risk premium of owing Hacker Corporation's stock?
12.35%
11.05%
9.15%
-12.85%
2 points
QUESTION 39
What range of returns would you expect to see 99% of the time?
(-5.67%, 31.67%)
(-36.52%, 61.52%)
(-22.54%, 44.54%)
(-32.37%, 51.37%)
2 points
QUESTION 40
What is the geometric average return for the 4-year period?
11.53%
10.91%
10.68%
12.97%
a.14.29%
b.16.34%
c.17.08%
d.15.25%
Explanation / Answer
37.
total return = 4* average return = 4*12.5%=50%
now total return = 22%+14%-11%+N
50%=25%+N
N=25% IS FOR THE 4TH YEAR
use excel function STDEV for standrad deviation as follows:
=stdev(22%,14%,-11%,25%)=16.34%