Question

In: Finance

You bought Sumsung stock for $45 on April 1. The stock paid a dividend of $2...

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?

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Note- Population Standard deviation calculated in above picture, if you need you can also calculate Sample standard deviation by using "STDEV.S" excel function.

If you need manual calculation, please do comment.

Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.

jeff jeffy answered 5 months ago
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