1. 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. Consider the case of Celestial Crane Cosmetics Inc (CCC): Five years of realized returns for COC are given in the following table. Remember: 1. While coc was started 40 years ago, its common stock has been publicly traded for the past 25 years, 2. The returns on its equity are calculated as arithmetic returns 3. They returns for ccc for 2014 to 2018 are: 2014 2015 6.B0% 2016 12.00% 2017 16.80% 2018 5.20% Stock return 10.0096 Given the preceding data, the average realized return on CCC's stock is of coc's historical returns. Based on this conclusion, the standard deviation of CCC'S The preceding data series represents historical returns is If investors expect the average realized return from 2014 to 2018 on CCC's stock to continue into the future, its coefficient of variation (CV) will be Returns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future resu Analysts across companies use realized stock returns to estimate the risk of a stock. Consider the case of Celestial Crane Cosmetics Inc. (CCC): 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 publicly traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for CCC for 2014 to 2018 are: 2014 2015 2016 2017 2018 Stock return 10.00% 6.80% 12.00% 16.80% 5.20% Given the preceding data, the average realized return on CCC's stock is of CCC's hist 20.32% Ins. Based on this conclusion, the standard devi The preceding data series represents historical returns is 31.50% 10.16% If investors expect the average realized return from 2014 to 2018 on CC o continue into the future, its coefficient of var 25.40% 2014 to 2018 are: 2014 2015 2016 2017 2018 Stock return 10.00% 6.80% 12.00% 16.80% 5.20% a sample Given the preceding data, the averag the population bn CCC's stock is the universe The preceding data series represents historical returns is of CCC's historical returns. Based on th If investors expect the average realized return from 2014 to 2018 on CCC's stock to continue into 1. While CCC was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for CCC for 2014 to 2018 are: 2014 2015 2016 2017 2018 Stock return 100%. 6.80% 12.00% 16.80% 5.20% 3.52% 4.08% the preceding 6.16% average realized return on CCC's stock is receding data 4.57% resents of CCC's historical returns. Based on this conclu ical returns is estors expect the average realized return from 2014 to 2018 on CCC's stock to continue into the futu 1. While CCC was started 40 years ago, its common stock has been publicly traded for the past 25 ye 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for CCC for 2014 to 2018 are: 2014 2015 2016 2017 2018 Stock return 10.00% 6.80% 12.00% 16.80% 5.20% 0.45 e preceding data, the average realized return on CCC's stock is 0.83 eding data series represents 0.38 returns is of CCC's historical returns. Based on this co 0.52 brs expect the average realized return from 2014 to 2018 on CCC's stock to continue into the