IFM10 StBAM Ch02 P14

# IFM10 StBAM Ch02 P14 - Chapter 2 Ch 02 P14 Build a Model a...

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3/12/2008 Chapter 2. Ch 02 P14 Build a Model Data as given in the problem are shown below: Bartman Industries Reynolds Incorporated Market Index Year Stock Price Dividend Stock Price Dividend Includes Divs. 2009 \$17.25 \$1.15 \$48.75 \$3.00 11,663.98 2008 \$14.75 \$1.06 \$52.30 \$2.90 8,785.70 2007 \$16.50 \$1.00 \$48.75 \$2.75 8,679.98 2006 \$10.75 \$0.95 \$57.25 \$2.50 6,434.03 2005 \$11.37 \$0.90 \$60.00 \$2.25 5,602.28 2004 \$7.62 \$0.85 \$55.75 \$2.00 4,705.97 We now calculate the rates of return for the two companies and the index: Bartman Reynolds Index 2009 24.7% -1.1% 32.8% 2008 -4.2% 13.2% 1.2% 2007 62.8% -10.0% 34.9% 2006 2.9% -0.4% 14.8% 2005 61.0% 11.7% 19.0% Average 29.5% 2.7% 20.6% Use the function wizard to calculate the standard deviations. Bartman Reynolds Index Standard deviation of returns 31.5% 9.7% 13.8% c. Now calculate the coefficients of variation Bartman, Reynolds, and the Market Index. Bartman Reynolds Index Coefficient of Variation 1.07 3.63 0.67 a. Use the data given to calculate annual returns for Bartman, Reynolds, and the Market Index, and then calculate average returns over the five-year period. (Hint: Remember, returns are calculated by subtracting the

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IFM10 StBAM Ch02 P14 - Chapter 2 Ch 02 P14 Build a Model a...

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