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 fiveyear period.
(Hint: Remember, returns are calculated by subtracting the
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 Spring '08
 Standard Deviation, market risk premium, Bartman, market index

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