3. Measuring standalone risk using realized (historical) data Aa Aa Retums eamed over a given time period are called realized returns. Historical data on realized retums 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 retums 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 retums on its equity are calculated as arithmetic retums. 3. The historical returns for coc for 2012 to 2016 are: 2012 2013 2014 2015 2016 Stock retum 8.75% 5.95% 10.50W 14.70 4.55% Given the preceding data, the average realized retum on CCC's stock is of Occ's historical retums. Based on this conclusion, the The preceding data series represents standard deviation of CCC's historical retums is It investors expect the average realized retum from 2012 to 2018 on CCC's stock to continue into the future, its coefficient of variation (Ov) will be