Use Bartman Industries’ and Reynolds Incorporated’s stock prices and dividends, along with the Market Index, shown below for the period 1997-2002 to answer the following questions
Bartman Industries
Reynolds Incorporated
Year
Stock Price
Div
Market Returns
2002
$17.250
$1.150
$48.750
$3.000
11,663.98
2001
14.750
1.060
52.300
2.900
8,785.70
2000
16.500
1.000
48.750
2.750
8,676.98
1999
10.750
0.950
57.250
2.500
6,434.03
1998
11.375
0.900
60.000
2.250
5,602.28
1997
7.625
0.850
55.750
2.000
4,705.97
Required:
1. Use the data given to calculate annual returns for Bartman, Reynolds, and the Market Index, and then calculate average returns over the 5-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 1997 because you do not have 1996 data.)
2. Calculate the standard deviations of the returns for Bartman, Reynolds, and the Market Index.
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