Question: This is the problem from financial economics class. Problem 2 (10 points) Suppose you held a stock A in 2014-2017 (4 years). The following table

This is the problem from financial economics class.

This is the problem from financial economics class. Problem 2 (10 points)

Problem 2 (10 points) Suppose you held a stock A in 2014-2017 (4 years). The following table lists detailed infor- mation about this asset with time weights (probabilities). And the risk-free rate was 4%. Period Probability One-year HPR Ending price Beginning price 2014 1/4 13% $135 $125 2015 1/4 28% $150 $120 2016 1/4 -11% $110 $130 2017 1/4 35% $185 $140 (a) Compute the geometric (time-weighted) average return, arithmetic average return and estimated standard deviation. Explain why we usually use standard deviation as measure- ment of risk instead of estimated variance. (c) Calculate Sharpe ratio. (b) What is the dividend paid by stock A for each year

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