3. Measuring stand-alone risk using realized (historical) data Returns earned over a given time period are called realized returns. Historien 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. (LM): 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 2017 2018 7.80% Stock return 15.00% 10.20% 18.00% 25.20%