3. Measuring standalone risk using realized data Returns eamed over a given time period are called realized retums. 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. Fue years of realized returns for Blue Uama Mining Inc. (Blue Llama) are given in the following table: Also note that: 1. While Blue Uama was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on Blue Lama's equaty are calculated as arithmetic retums. Given this retum data, the ayerage realized retum on Blue Lama Mining Incis stock is The preceding data series represents a sample of alue Lama's historical roturns. Based on this condusion, the standard deviation of Blue Liama's historical returns is If investors expect the average realized return on Blue Liama Mining Incis stock from 2016 to 2020 to continue into the future, its expected coefficient of variation (CV) is expected to equal