Estimate the standard deviation and variance in annual

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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 (dollars)

Dividends (dollars)

1989

36.10

3.00

1990

33.60

3.00

1991

37.80

3.00

1992

30.90

1.30

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 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: EM132034939

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