Date Open High Low Close Adj Close Volume Nov 03, 2023 15 90 16 04 15 83 15 88 15 88 42,470,585 Oct 31, 2023 15 49 16 04 15 43 15 88 15 88 120,092,800 Oct 06, 2023 0 278 Dividend Sep 30, 2023 15 04 15 91 14 12 15 40 15 11 950,723,100 Aug 31, 2023 14 81 15 73 14 32 15 02 14 74 699,432,300 Jul 31, 2023 14 56 14 99 13 89 14 79 14 51 813,956,600 Jul 07, 2023 0 278 Dividend Jun 30, 2023 15 95 16 23 13 43 14 52 14 00 1,285,717,500 May 31, 2023 15 75 16 13 14 85 15 95 15 38 804,420,200 Apr 30, 2023 17 74 17 76 15 00 15 73 15 16 860,925,100 Apr 06, 2023 0 278 Dividend Mar 31, 2023 19 27 19 99 17 19 17 67 16 80 777,350,500 Mar 01, 2023 18 83 19 25 18 03 19 25 18 30 660,086,700 Feb 01, 2023 20 47 20 50 18 83 18 91 17 98 563,079,500 Jan 09, 2023 0 278 Dividend Jan 01, 2023 18 51 21 53 18 41 20 37 19 09 777,779,600 Dec 01, 2022 19 29 19 52 17 64 18 41 17 25 824,021,900 Oct 31, 2022 18 57 19 39 18 07 19 28 18 07 803,114,100 Oct 06, 2022 0 278 Dividend Sep 30, 2022 15 73 18 59 14 46 18 23 16 78 1,188,340,400 Aug 31, 2022 17 49 17 67 15 34 15 34 14 12 958,698,100 Jul 31, 2022 18 85 18 87 17 51 17 54 16 15 769,649,200 Jul 08, 2022 0 278 Dividend Jun 30, 2022 20 97 21 39 18 18 18 78 17 06 743,894,600 May 31, 2022 21 44 21 47 18 67 20 96 19 04 838,975,300 Apr 30, 2022 19 00 21 53 18 86 21 29 19 34 1,005,195,300 Apr 13, 2022 0 278 Dividend Apr 11, 2022 1324 1000 Stock Split Mar 31, 2022 17 92 20 35 17 67 18 86 16 89 1,346,823,217 Mar 01, 2022 17 83 18 24 17 23 17 85 15 99 1,210,104,223 Feb 01, 2022 18 27 18 81 17 11 17 89 16 03 1,300,035,599 Jan 07, 2022 0 52 Dividend Jan 01, 2022 18 72 20 76 17 79 19 26 16 80 1,828,521,981 Dec 01, 2021 17 37 18 97 16 63 18 58 16 20 1,834,795,096 Oct 31, 2021 19 23 19 32 17 03 17 24 15 04 1,278,172,519 Oct 07, 2021 0 52 Dividend Sep 30, 2021 20 50 20 76 18 89 19 08 16 22 1,339,836,364 Aug 31, 2021 20 73 21 10 20 35 20 40 17 34 984,413,994 Jul 31, 2021 21 33 21 56 20 30 20 71 17 61 789,806,781 Jul 08, 2021 0 52 Dividend Jun 30, 2021 21 82 22 17 20 77 21 19 17 58 935,588,977 May 31, 2021 22 25 22 39 21 46 21 74 18 04 1,032,169,347 Apr 30, 2021 24 00 25 59 21 65 22 23 18 45 1,665,976,094 Apr 08, 2021 0 52 Dividend Mar 31, 2021 22 84 24 09 22 13 23 72 19 25 1,058,549,388 Mar 01, 2021 21 27 23 32 21 16 22 86 18 55 1,398,177,232 Feb 01, 2021 21 86 22 52 21 06 21 06 17 09 998,358,098 Jan 08, 2021 0 52 Dividend Jan 01, 2021 22 20 22 81 21 50 21 62 17 14 1,224,161,530 Dec 01, 2020 21 77 24 09 21 39 21 72 17 22 1,284,157,530 Oct 31, 2020 20 69 22 24 20 29 21 71 17 21 971,405,428 Oct 08, 2020 0 52 Dividend Sep 30, 2020 21 54 22 02 19 90 20 41 15 79 1,248,679,758 Aug 31, 2020 22 46 22 79 20 96 21 53 16 66 1,017,387,416 Jul 31, 2020 22 62 23 24 22 21 22 52 17 42 762,810,420 Jul 09, 2020 0 52 Dividend Jun 30, 2020 22 76 23 11 22 05 22 34 16 90 1,003,774,316 May 31, 2020 23 23 25 11 21 84 22 83 17 27 1,170,276,053 Apr 30, 2020 23 24 24 22 20 85 23 31 17 63 959,846,510 Apr 08, 2020 0 52 Dividend Mar 31, 2020 21 44 24 07 20 58 23 01 17 01 1,117,249,324 Mar 01, 2020 26 71 28 87 19 70 22 02 16 27 1,883,263,293 Feb 01, 2020 28 67 29 32 24 93 26 60 19 66 922,054,388 Jan 09, 2020 0 52 Dividend Jan 01, 2020 29 58 29 87 27 43 28 41 20 63 982,957,591 Dec 01, 2019 28 31 29 78 27 88 29 52 21 43 679,722,535 Oct 31, 2019 29 42 29 98 27 49 28 23 20 50 802,378,688 Oct 09, 2019 0 51 Dividend Sep 30, 2019 28 66 29 36 27 60 29 07 20 73 853,834,224 Aug 31, 2019 26 50 29 27 26 37 28 58 20 38 1,012,501,065 Jul 31, 2019 26 04 26 81 25 07 26 63 18 99 834,448,749 Jul 09, 2019 0 51 Dividend Jun 30, 2019 25 54 26 16 23 81 25 72 17 97 891,283,965 May 31, 2019 23 20 25 34 23 17 25 31 17 69 679,868,042 Apr 30, 2019 23 45 24 98 22 76 23 10 16 14 816,153,717 Apr 09, 2019 0 51 Dividend Mar 31, 2019 23 87 24 56 22 70 23 38 16 00 875,160,822 Mar 01, 2019 23 56 23 90 22 41 23 69 16 21 809,223,372 Feb 01, 2019 22 82 23 74 21 84 23 50 16 08 734,370,370 Jan 09, 2019 0 51 Dividend Jan 01, 2019 21 53 23 70 21 37 22 70 15 20 1,035,320,203 Dec 01, 2018 23 97 24 18 20 24 21 56 14 43 1,268,699,299 PLEASE USE THE 60 MONTH DATA IN THIS CHART ABOVE PLEASE SHOW STEPS WITH FORMLAS THANKS A) Compute the historical average (that represents the expected return) and standard deviation of the 60 monthly observations of return on the stock under analysis B) Compute its Sharpe ratio For example, for Microsoft, its Sharpe ratio is the difference between the historical average of MSFT returns and the historical average of SHY returns, divided by MSFT standard deviation For example, if the average monthly return of MSFT is 1 , the average monthly return of SHY is 0 25 , and the standard deviation of MSFT monthly return is 7 50 , then the monthly MSFT Sharpe ratio is (1 0 25 ) 7 50 0 10 C) Conventionally risk and return measures, as well as Sharpe ratios, are annualized To annualize the risk and return measures, scale expected returns by multiplying by 12, and standard deviations and Sharpe ratios by multiplying by 12 (approximately 3 464) Following the above mentioned example, the annualized expected return of MSFT is 12 1 12 , the annualized standard deviation of MSFT is 12 7 50 25 98 , and the annualized Sharpe ratio of MSFT is 12 0 10 0 3464

The Answer is in the image, click to view ...

Question: Date Open High Low Close* Adj Close** Volume Nov 03, 2023 15.90 16.04 15.83 15.88 15.88 42,470,585 Oct 31, 2023 15.49 16.04 15.43 15.88 15.88

Date	Open	High	Low	Close*	Adj Close**	Volume
Nov 03, 2023	15.90	16.04	15.83	15.88	15.88	42,470,585
Oct 31, 2023	15.49	16.04	15.43	15.88	15.88	120,092,800
Oct 06, 2023	0.278 Dividend
Sep 30, 2023	15.04	15.91	14.12	15.40	15.11	950,723,100
Aug 31, 2023	14.81	15.73	14.32	15.02	14.74	699,432,300
Jul 31, 2023	14.56	14.99	13.89	14.79	14.51	813,956,600
Jul 07, 2023	0.278 Dividend
Jun 30, 2023	15.95	16.23	13.43	14.52	14.00	1,285,717,500
May 31, 2023	15.75	16.13	14.85	15.95	15.38	804,420,200
Apr 30, 2023	17.74	17.76	15.00	15.73	15.16	860,925,100
Apr 06, 2023	0.278 Dividend
Mar 31, 2023	19.27	19.99	17.19	17.67	16.80	777,350,500
Mar 01, 2023	18.83	19.25	18.03	19.25	18.30	660,086,700
Feb 01, 2023	20.47	20.50	18.83	18.91	17.98	563,079,500
Jan 09, 2023	0.278 Dividend
Jan 01, 2023	18.51	21.53	18.41	20.37	19.09	777,779,600
Dec 01, 2022	19.29	19.52	17.64	18.41	17.25	824,021,900
Oct 31, 2022	18.57	19.39	18.07	19.28	18.07	803,114,100
Oct 06, 2022	0.278 Dividend
Sep 30, 2022	15.73	18.59	14.46	18.23	16.78	1,188,340,400
Aug 31, 2022	17.49	17.67	15.34	15.34	14.12	958,698,100
Jul 31, 2022	18.85	18.87	17.51	17.54	16.15	769,649,200
Jul 08, 2022	0.278 Dividend
Jun 30, 2022	20.97	21.39	18.18	18.78	17.06	743,894,600
May 31, 2022	21.44	21.47	18.67	20.96	19.04	838,975,300
Apr 30, 2022	19.00	21.53	18.86	21.29	19.34	1,005,195,300
Apr 13, 2022	0.278 Dividend
Apr 11, 2022	1324:1000 Stock Split
Mar 31, 2022	17.92	20.35	17.67	18.86	16.89	1,346,823,217
Mar 01, 2022	17.83	18.24	17.23	17.85	15.99	1,210,104,223
Feb 01, 2022	18.27	18.81	17.11	17.89	16.03	1,300,035,599
Jan 07, 2022	0.52 Dividend
Jan 01, 2022	18.72	20.76	17.79	19.26	16.80	1,828,521,981
Dec 01, 2021	17.37	18.97	16.63	18.58	16.20	1,834,795,096
Oct 31, 2021	19.23	19.32	17.03	17.24	15.04	1,278,172,519
Oct 07, 2021	0.52 Dividend
Sep 30, 2021	20.50	20.76	18.89	19.08	16.22	1,339,836,364
Aug 31, 2021	20.73	21.10	20.35	20.40	17.34	984,413,994
Jul 31, 2021	21.33	21.56	20.30	20.71	17.61	789,806,781
Jul 08, 2021	0.52 Dividend
Jun 30, 2021	21.82	22.17	20.77	21.19	17.58	935,588,977
May 31, 2021	22.25	22.39	21.46	21.74	18.04	1,032,169,347
Apr 30, 2021	24.00	25.59	21.65	22.23	18.45	1,665,976,094
Apr 08, 2021	0.52 Dividend
Mar 31, 2021	22.84	24.09	22.13	23.72	19.25	1,058,549,388
Mar 01, 2021	21.27	23.32	21.16	22.86	18.55	1,398,177,232
Feb 01, 2021	21.86	22.52	21.06	21.06	17.09	998,358,098
Jan 08, 2021	0.52 Dividend
Jan 01, 2021	22.20	22.81	21.50	21.62	17.14	1,224,161,530
Dec 01, 2020	21.77	24.09	21.39	21.72	17.22	1,284,157,530
Oct 31, 2020	20.69	22.24	20.29	21.71	17.21	971,405,428
Oct 08, 2020	0.52 Dividend
Sep 30, 2020	21.54	22.02	19.90	20.41	15.79	1,248,679,758
Aug 31, 2020	22.46	22.79	20.96	21.53	16.66	1,017,387,416
Jul 31, 2020	22.62	23.24	22.21	22.52	17.42	762,810,420
Jul 09, 2020	0.52 Dividend
Jun 30, 2020	22.76	23.11	22.05	22.34	16.90	1,003,774,316
May 31, 2020	23.23	25.11	21.84	22.83	17.27	1,170,276,053
Apr 30, 2020	23.24	24.22	20.85	23.31	17.63	959,846,510
Apr 08, 2020	0.52 Dividend
Mar 31, 2020	21.44	24.07	20.58	23.01	17.01	1,117,249,324
Mar 01, 2020	26.71	28.87	19.70	22.02	16.27	1,883,263,293
Feb 01, 2020	28.67	29.32	24.93	26.60	19.66	922,054,388
Jan 09, 2020	0.52 Dividend
Jan 01, 2020	29.58	29.87	27.43	28.41	20.63	982,957,591
Dec 01, 2019	28.31	29.78	27.88	29.52	21.43	679,722,535
Oct 31, 2019	29.42	29.98	27.49	28.23	20.50	802,378,688
Oct 09, 2019	0.51 Dividend
Sep 30, 2019	28.66	29.36	27.60	29.07	20.73	853,834,224
Aug 31, 2019	26.50	29.27	26.37	28.58	20.38	1,012,501,065
Jul 31, 2019	26.04	26.81	25.07	26.63	18.99	834,448,749
Jul 09, 2019	0.51 Dividend
Jun 30, 2019	25.54	26.16	23.81	25.72	17.97	891,283,965
May 31, 2019	23.20	25.34	23.17	25.31	17.69	679,868,042
Apr 30, 2019	23.45	24.98	22.76	23.10	16.14	816,153,717
Apr 09, 2019	0.51 Dividend
Mar 31, 2019	23.87	24.56	22.70	23.38	16.00	875,160,822
Mar 01, 2019	23.56	23.90	22.41	23.69	16.21	809,223,372
Feb 01, 2019	22.82	23.74	21.84	23.50	16.08	734,370,370
Jan 09, 2019	0.51 Dividend
Jan 01, 2019	21.53	23.70	21.37	22.70	15.20	1,035,320,203
Dec 01, 2018	23.97	24.18	20.24	21.56	14.43	1,268,699,299

PLEASE USE THE 60 MONTH DATA IN THIS CHART ABOVE. PLEASE SHOW STEPS WITH FORMLAS - THANKS!

A) Compute the historical average (that represents the expected return) and standard deviation of the 60 monthly observations of return on the stock under analysis.

B) Compute its Sharpe ratio. For example, for Microsoft, its Sharpe ratio is the difference between the historical average of MSFT returns and the historical average of SHY returns, divided by MSFT standard deviation.

For example, if the average monthly return of MSFT is 1%, the average monthly return of SHY is 0.25%, and the standard deviation of MSFT monthly return is 7.50%, then the monthly MSFT Sharpe ratio is (1%0.25%)/7.50% = 0.10.

C) Conventionally risk and return measures, as well as Sharpe ratios, are annualized. To annualize the risk and return measures, scale expected returns by multiplying by 12, and standard deviations and Sharpe ratios by multiplying by 12 (approximately 3.464).

Following the above-mentioned example, the annualized expected return of MSFT is 12 1% = 12%, the annualized standard deviation of MSFT is 12 7.50% = 25.98%, and the annualized Sharpe ratio of MSFT is 12 0.10 = 0.3464.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

can anyone help me with my assignment, which is consist part 1 and 2. but i already done the part 1 and now i need someone to settle this out. here i attach the question including my answer for part...

Securities Closing Prices \begin{tabular}{|l|r|r|r|} \hline Securities & \multicolumn{1}{|l|}{ price } & shares & \multicolumn{1}{l|}{ total price } \\ \hline Apple (AAPL) & 175.33 & 150 & 26,299.5...

1. You will be assigned twenty (20) stocks from the current S&P 500 index. You must use these 20 stocks (or, more precisely, the ticker symbols) to download data from yahoo.com. Go to yahoo.com, then...

Suppose the annual rate of return on the risk-free asset is 2%. Construct the tangency portfolio consisting of the 5 selected stocks, M . Find the weights of the selected 5 stocks in M . Find the...

Please let me know what is wrong with the question it is the instruction given by the university Decide which of the below companies is suitable for investment based on the given information. Perform...

1. Verizon ATT: 2. Verizon: ATT: Problem 1 On Monday January 17, 2017 an investor wanted to invest $1,000,000 in two stocks Verizon (VZ) and ATT (T). Using historical adjusted weekly closes from...

Calculate monthly returns for all four assets, expected monthly and annualized return, monthly and annualized variance and standard deviation, covariances and correlations among all pairs of the...

2. Forecasting Stock Prices Modeling stock price behavior is a difficult (nay, impossible) and potentially very risky undertaking. But let's try it anyway! Suppose that over a certain time frame we...

Question: Calculate the beta for each stock using Excels Slope or Linest function to use estimate the slope of the linear regression line, which is beta. Use the S&P 500 index as the market portfolio...

Question 1: You are given foreign currency forecasts for a number of currency pairs in Table 1. You are a forex trader and wish to use the forecasts for September 2021 to make a profit. Required (a)...

Change to LIFO Retail; Dollar-Value LIFO Retail Davenport Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2010, and is now considering...

En verdad, no es fcil vivir en este mundo sin (considerar) las cuestiones financieras

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): $ 210,000 $ 263,000 Selling expenses Purchases of raw...

1. Explain how affirmative and negative majority votes can sometimes lead to inefficient allocations of resources to public goods. Is this problem likely to be greater under a benefits-received or an...

4. How does the problem of limited and bundled choice in the public sector relate to economic efficiency? Why are public bureaucracies possibly less efficient than business firms? LO5.2

5. Discuss the political incentives that helped motivate federal politicians to approve budget deficits in all but five years between 1960 and 2015. LO5.2