# Fight Finance

#### CoursesTagsRandomAllRecentScores

Let the variance of returns for a share per month be $\sigma_\text{monthly}^2$.

What is the formula for the variance of the share's returns per year $(\sigma_\text{yearly}^2)$?

Assume that returns are independently and identically distributed (iid) so they have zero auto correlation, meaning that if the return was higher than average today, it does not indicate that the return tomorrow will be higher or lower than average.

A stock's standard deviation of returns is expected to be:

• 0.09 per month for the first 5 months;
• 0.14 per month for the next 7 months.

What is the expected standard deviation of the stock per year $(\sigma_\text{annual})$?

Assume that returns are independently and identically distributed (iid) and therefore have zero auto-correlation.

Which of the following statements about standard statistical mathematics notation is NOT correct?

The standard deviation and variance of a stock's annual returns are calculated over a number of years. The units of the returns are percent per annum $(\% pa)$.

What are the units of the standard deviation $(\sigma)$ and variance $(\sigma^2)$ of returns respectively?

Hint: Visit Wikipedia to understand the difference between percentage points $(\text{pp})$ and percent $(\%)$.

 Price Data Time Series Sourced from Yahoo Finance Historical Price Data Date S&P500 Index (^GSPC) Apple (AAPL) Open High Low Close Adj close Open High Low Close Adj close 2007, Wed 3 Jan 1418 1429 1408 1417 1417 12.33 12.37 11.7 11.97 10.42 2008, Wed 2 Jan 1468 1472 1442 1447 1447 28.47 28.61 27.51 27.83 24.22 2009, Fri 2 Jan 903 935 899 932 932 12.27 13.01 12.17 12.96 11.28 2010, Mon 4 Jan 1117 1134 1117 1133 1133 30.49 30.64 30.34 30.57 26.6 Source: Yahoo Finance.

Which of the following statements about the above table which is used to calculate Apple's equity beta is NOT correct?

 Price Data Time Series Sourced from Yahoo Finance Historical Price Data Date Adjusted close S&P500 Index(^GSPC) Tesla(TSLA) 2017, Fri 29 Dec 2673.61 62.27 2018, Mon 31 Dec 2506.85 66.56 2019, Tue 31 Dec 3230.78 83.67 2020, Tue 31 Dec 3756.07 705.67 Source: Yahoo Finance.

Which of the following statements about the above table which is used to calculate Tesla's equity beta is NOT correct? Over the last 4 years the historical: