Question: 1. (20 points) Consider recent monthly prices and dividends for Mermaid Shipping Co (MSC) stock: The Mermaid Shipping Company Month Ended Stock Price Dividend December,

1. (20 points) Consider recent monthly prices and dividends for Mermaid

1. (20 points) Consider recent monthly prices and dividends for Mermaid Shipping Co (MSC) stock: The Mermaid Shipping Company Month Ended Stock Price Dividend December, 2019 $57.91 $0.62 November, 2019 $54.48 None October, 2019 $57.63 None September, 2019 $57.00 None a. Calculate monthly holding period returns for MSC stock for November and December. b. Using your returns from part (a), calculate monthly expected returns and expected volatility E[Rm] & E[Om] for MSC stock. Assume your returns from (a) occur with equal probability. c. Calculate annualized expected returns and volatility for MSC stock. d. Assume the annual risk free rate is 3%. What is the expected annualized Sharpe ratio for MSC stock? How does it compare to the average historic Sharpe ratio for investing in the US stock market

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