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a. Use the data given to calculate annual returns for Bartman, Reynolds, ,and the Market Index, and then calculate average returns over the five-year ,period. (Hint: Remember, returns are calculated by subtracting the beginning ,price from the ending price to get the capital gain or loss, adding the dividend ,to the capital gain or loss, and dividing the result by the beginning price. ,Assume that dividends are already included in the index. Also, you cannot , calculate the rate of return for 2001 because you do not have 2000 data.) ,Ret06=(P06-P05+D06)/P05. ,Data as given in the problem are shown below: , Bartman Industries Reynolds Incorporated Market Index ,Year Stock Price Dividend Stock Price Dividend Includes Divs. ,2006 $17.250 $1.150 $48.750 $3.000 11,663.98 ,2005 14.750 1.060 52.300 2.900 8,785.70 ,2004 16.500 1.000 48.750 2.750 8,679.98 ,2003 10.750 0.950 57.250 2.500 6,434.03 ,2002 11.375 0.900 60.000 2.250 5,602.28 ,2001 7.625 0.850 55.750 2.000 4,705.97 , ,Note: To get the average, you could get the column sum and divide by 5, ,but you could also use the function wizard, fx. Click fx, then statistical, ,then Average, and then select the proper range. ,Do this for Bartman and then copy the cell for the other items. , ,Year Rbart Rrey Rm ,2006 ,2005 ,2004 ,2003 ,2002 , , , ,b. Calculate the standard deviation of the returns for Bartman, Reynolds, ,and the Market Index. (Hint: Use the sample standard deviation formula ,given in the chapter, which corresponds to the STDEV function in Excel.) , , , , , ,

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