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Prob 12-1 From the information below, compute the average annual return, the variance, standard deviation, and coefficient of variation for each asset. Asset A 5% 10% 15% 4% B -6% 20% 2% -5% 10% C 12% 15% 17% D 10% -10% 20% -15% 8% -7% Average Return Variance Standard Deviation Coefficient of Variation Asset A Asset B Asset C Asset D Prob 12-2 Prob 12-5 RCMP, Inc. shares rose 10 percent in value last year while the inflation If an investor sold the stock after one year and paid taxes on the on the investment? Real return on stock real after-tax return on Prob 12-10 Given her evaluation of current economic conditions, Ima Nutt percent chance of continued steady growth, and a 30 percent developed an interest rate forecast for long-term Economic Forecast Interest Rate Forecast Recession 6 percent Constant growth 9 percent Inflation 14 percent ASSET ANNUAL RETURNS Based upon your answers to question 1, a. What is the expected interest rate under Ima’s Expected interest rate b. What is the variance and standard deviation of Variance Standard Deviation c. What is the coefficient of variation of Ima’s Coefficient of variation of Ima's interest rate d. If the current long-term Treasury bond interest rate is 8 percent, should Prob 12-11 a. What is Ima’s expected return forecast for Wallnut Forecast of expected b. What is the standard Standard Deviation c. If Wallnut’s current price is $20 per share and Wallnut is expected to pay price does Ima expect Wallnut to sell for in one Expected price Prob 12-19 EXCEL Spreadsheets are useful for computing statistics: averages, built-in functions. Below is recent monthly stock return data for ExxonMobil and its functions, compute the average, variance, standard deviation, and Month XOM ReturnMSFT Return November -4.6% 10.4% October 0.1% 13.6% September -1.9% -10.3% August -3.3% -13.8% July -4.4% -9.3% June -1.6% 5.5% May 0.7% 2.1% April 9.4% 23.9% March -0.1% -7.3% February -3.2% -3.4% XOM MSFT Average Return Variance Standard Deviation Correlation What does the correlation between the returns imply for a

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