3. Measuring stand-alone risk using realized (historical)data.

Ch 08- Assignment- Risk and Rates of Return Returns earned over a given time period are called realized returns. Histoncal dath on realred returns is oftee used to estimate future resulti. Analysts across companies use realized stock returns to estinate the rik of a stock. Consider the case of faleon freight ine (fF): Five vers of realized returns for if are given in the following table. Reniember: 1. While FF was started 40 years ago, its conmon stock has been publicly trades for the past 25 yearh. 2. The returns on its equity are calculated as arathmetic returns. 3. The histoncal returns for FF for 2014 to 2018 are: Given the precoding duts, the averane realized return an FFis stock is The preceding data senes represents of FF's historical returns. Based on this cenclusion, the standard deviation of fr's histuncal returns is If investors expect the averege realized return from 2014 to 2018 on fF: stock to continue into the future, its coetficeent of vanation (CV) will be Ch 08-Assignment-Risk and Rates of Return Returns earned over a given time period are called realized retums. Histonical dota on realized returns is often used to estimate future results. Analysts across companies use realized stock refurns to estimate the nsk of a stock. Consider the case of Fakcon Freight Inc (FF): Five years of realized retums for FF are given in the following table. Remember: 1. While ff was started 40 years ago, its common stock has been publidy traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for FF for 2014 to 2018 are: Given the preceding dota, the average realized return on FF's stock is The preceding data series represents returns is If investors expect the average realized return from 2014 to 2018 on 15.88% o continue into the future, its coefficent of variation (CV) will be Ch 08-Assignment-Risk and Rates of Return Retums earned 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 Falcon Freight inc. (FF): Five years of realized returns for FF are given in the following table. Remember: 1. While FF 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 arithinetic returns. 3. The historical returns for ff for 2014 to 2018 are: Given the preceding data, the averag nFF 's stock is The preceding data series represents of FF's historical returns. Based on this conclusion, the standard deviation of FF's historical returns is If investors expect the average realized return from 2014 to 2018 on FF's stock to continue into the future, its coeficient of variation (CV) will be Ch 08-Assignment - Risk and Rates of Return Returns eamed overa given time period are called realized refums. 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 falcon Freight inc. (ft): Five years of realized returns for FF are given in the fotlowing table. Remember: 1. While FF was started 40 years ago, its common stock has been publicy traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The histonical returns for ff for 2014 to 2018 are: returns is If investors expect the average realized retum from 2014 ro 2018 on FF's stock to continue into the future, its coefficient of variation (CV) .nil be Returns earned over a given time period are called realized retums. Historical dats on realized retums is often used to estimate future results Analysts across companies use realized stock returns to estamate the risk of a stock. Consider the case of Falcon Freight-Inc. (FF): Five years of realized returns for FF are given in the following table. Remember: 1. While FF 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 retums: 3. The histoncal returns for FF for 2014 to 2018 are: 0.45 = preceding data, the average realued return on FF s stock is 0.52 eding data senes represents of fif's historical returns. Based on this conclusion, the standard deviation of FF's historical 0.38 0.83 frs expect the average realized return from 2014 to 2018 on FF5 stock to continue into the future. its coefficient of variation (CV) will be