0 Ch 08: Assignment 2 3. Measuring stand-alone risk using realized (historical) data Returns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future results. Analysts across companies use realized stock returns to estimate the risk of a stock a Consider the case of Celestial Crane Cosmetles Inc. (COC): Five years of realized returns for CCC are given in the following table. Remember: 1. While CCC was started 40 years ago, its common stock has been publicy traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The historical retums for CCC for 2014 to 2018 are: 2014 2018 2015 12.75% 2016 2017 22.50% 31.50% Stock retum 18.75% 9.75% Given the preceding data, the average realized return on CCC's stock is of CCC's historical returns. Based on this conclusion, the standard deviation of COC'S The preceding data series represents historical retums is If investors expect the average realized return from 2014 to 2018 on CCC's stock to continue into the future, its coeficient of vanation (CV) will be