What is the standard deviation of return of a stock

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Reference no: EM131523320

1. What is the standard deviation of return of a stock that produced returns of 10%, 20%, 30%, and 40% in the last four periods?

2. Why do stock market investors appear not to be concerned with unique (firm specific) risks when calculating expected rates of return

a. They can build portfolios with zero total risk

b. Unique risks can be eliminated through diversification

c. There is no method to quantify unique risks

d. Risk premium for risky assets includes a component to compensate for unique risk

3. A stock provides an (expected) return of 16%. The risk free rate (e.g., T-Bill rate) is 3%. What is the risk premium for the stock?

4. The standard deviations of individual stocks are generally higher than the standard deviation of the market portfolio for which of the following reasons?

a. Individual stocks have more systematic risks

b. Individual stocks have no diversification of risk

c. Individual stocks do not have unique risk

d. Individual stocks offer higher returns

Reference no: EM131523320

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