# BD_DC10 - Stock AAPL ADM BA C CAT DE Annual Std 41.62 28.09...

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Chapter 10 Capital Markets and the Pricing of Risk Solutions to Chapter 10 Data Case Numerical solutions to this case are available in Excel spreadsheet form, available on the Instructor’s Resource Center: http://www.aw-bc.com, with the files for the Solutions Manual, and on the Instructor’s Resource Disk. 1. The spreadsheet solution file contains a worksheet with the prices as downloaded from Yahoo!. 2. The spreadsheet solution file contains a worksheet with the computation of monthly returns for each stock. 3. The mean returns and standard deviations for each stock are as follows: Stock AAPL ADM BA C CAT DE Std. Dev 0.120161 0.081097 0.087469 0.067664 0.079993 0.0739 Mean 0.038237 0.024863 0.01026 0.005217 0.021984 0.018461 Stock HSY MOT PG SIRI WMT YHOO Std. Dev 0.058564 0.096898 0.036546 0.382474 0.022476 0.153951 Mean 0.013698 0.013587 0.011461 0.032206 -4.4E-05 0.032802 The annualized values are as follows:

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Unformatted text preview: Stock AAPL ADM BA C CAT DE Annual Std 41.62% 28.09% 30.30% 23.44% 27.71% 25.60% Annual Return 45.88% 29.84% 12.31% 6.26% 26.38% 22.15% Stock HSY MOT PG SIRI WMT YHOO Annual Std 20.29% 33.57% 12.66% 132.49% 7.79% 53.33% Annual Return 16.44% 16.30% 13.75% 38.65%-0.05% 39.36% 4. The portfolio annual return and standard deviations are as follows: Return = 22.27% and Standard Deviation = 22.10% 5. The chart is shown on a separate spreadsheet labeled “Chart 2” 6. Unfortunately, the portfolio does not stand out in the chart as much as it appears it would given the results for return and standard deviation. However, by looking at the reward to risk ratio dividing annual mean return by standard deviation shows how the portfolio ranks versus the individual stocks. This can lead to the discussion in chapter 11....
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## This note was uploaded on 12/28/2009 for the course FEWEB CORPFIN taught by Professor Dorsman during the Spring '09 term at Vrije Universiteit Amsterdam.

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BD_DC10 - Stock AAPL ADM BA C CAT DE Annual Std 41.62 28.09...

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