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You bought Sumsung stock for $45 on April 1. The stock paid a dividend of $2 on July 1, and had a price of $55. It is now Oct. 1, and the stock price is $50. Treasury bills yield 1%. 1. What was the arithmetic
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You bought Sumsung stock for $45 on April 1. The stock paid a dividend of $2 on July 1, and had a price of $55. It is now Oct. 1, and the stock price is $50. Treasury bills yield 1%.

1. What was the arithmetic average quarterly return?
2. What was the standard deviation of quarterly returns?
3. What's your best guess for the Sharpe ratio of Samsung stock for the next quarter?

User Eric Hodonsky
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1 Answer

3 votes

Answer:

1. the arithmetic average quarterly return = 8.79%

2. the standard deviation of quarterly returns = 17.8788%

3. the Sharpe ratio of Samsung stock for the next quarter= 0.435593

Step-by-step explanation:

From the given question;

We use the EXCEL SOFTWARE TO CALCULATE THE:

the arithmetic average quarterly return

the standard deviation of quarterly returns &

the Sharpe ratio of Samsung stock for the next quarter

In the two diagram attached below, the first show the data entry and the output and the second diagram show how we compute the cell reference to estimate the answers.

You bought Sumsung stock for $45 on April 1. The stock paid a dividend of $2 on July-example-1
You bought Sumsung stock for $45 on April 1. The stock paid a dividend of $2 on July-example-2
You bought Sumsung stock for $45 on April 1. The stock paid a dividend of $2 on July-example-3
User UnLiMiTeD
by
4.4k points
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