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 Blue Lama Mining Inc. (BLM): Five years of realized returns for BLM are given in the following table. Remember: 1. While BLM 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 BLM for 2014 to 2018 are: 2014 2015 2016 Stock return 13.759% 2017 2018 23.10% 7.15% 9.35% 16.50% Given the preceding data, the average realized return on BLM's stock is The preceding data series represents historical returns is 27.94% of BLM's hist ins. Based on this conclusion, the standard deviation of BLM'S 13.97% ir investors expect the average realized return from 2014 to 2018 on By 43.31% o continue into the future, Its coefficient of variation (CV) will be 34.93% Grade It Now Save & Continue ENGAGE MINDTAP er 8 Assignment i con very verre en GIC GUCU YENLEU VOLUIS. alysts across companies use realized stock returns to estimate the risk onsider the case of Blue Llama Mining Inc. (BLM): ve years of realized returns for BLM are given in the following table. Rem 1. While BLM was started 40 years ago, its common stock has been pu 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for BLM for 2014 to 2018 are: 2014 2015 2016 2017 Stock return 2018 7.15% 13.75% 9.35% 16.50% 23.10% the universe a sample Given the preceding data, the average bn BLM's stock is the population The preceding data series represents historical returns is of BLM's historical If investors expect the average realized return from 2014 to 2018 on BLM's sto SO Q CENGAGE MINDTAP Chapter 8 Assignment WELT CIVIC Ver oyiver une perrou or CU COLEU VEL Analysts across companies use realized stock returns to estima Consider the case of Blue Llama Mining Inc. (BLM): Five years of realized returns for BLM are given in the following 1. While BLM was started 40 years ago, its common stock h 2. The returns on its equity are calculated as arithmetic retu 3. The historical returns for BLM for 2014 to 2018 are: 2014 2015 2016 2017 23.10% Stock return 12 9.35% 16.50% 7 4.83% 5.62% Given the preceding 6.28% average realized return on BLM's sto 8.48% resents The preceding data historical returns is of BLM It investors expect the average realized return from 2014 to 2018 SO Chapter 8 Assignment NCCUITS CONCU UVEO GIVE TIC CU GIC LOCO CONCU Analysts across companies use realized stock returns to estin Consider the case of Blue Llama Mining Inc. (BLM): Five years of realized returns for BLM are given in the followin 1. While BLM was started 40 years ago, its common stock 2. The returns on its equity are calculated as arithmetic ret 3. The historical returns for BLM for 2014 to 2018 are: 2015 Stock return 2014 13.7596 2016 16.50% 2017 23.10% 9.3596 7 0.52 le preceding data, the average realized return on BLM's stoc 0.38 eding data series represents 0.45 returns is of BMS 0.83 prs expect the average realized return from 2014 to 2018 on 30 FA @ # $ %