Estimate the average annual return you would have made on

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Unicom is a regulated utility serving Northern Illinois. The following table lists the stock prices and dividends on Unicom from 1989 to 1998.

Year

Price

Dividends

1989

$36.10

$3.00

1990

$33.60

$3.00

1991

$37.80

$3.00

1992

$30.90

$2.30

1993

$26.80

$1.60

1994

$24.80

$1.60

1995

$31.60

$1.60

1996

$28.50

$1.60

1997

$24.25

$1.60

1998

$35.60

$1.60

a. Estimate the average annual return you would have made on your investment.

b. Estimate the standard deviation and variance in the annual returns.

c. If you were investing in Unicom today, would you expect the historical standard deviations and variances to continue to hold? Why or why not?

Reference no: EM13573376

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