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Financial Risk Manager Part 1

Financial Risk Manager Part 1

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A fund manager is analyzing the actual profit and the historical volatility of earnings for shares of VMG company. At the end of June 2021, VMG shares were valued at INR 280 each, and by the end of December 2021, their value had increased to INR 320 per share. The manager has observed that the stock's earnings experienced monthly fluctuations at a rate of 2.76% over this six-month period. Given that compounding is continuous and the stock’s earnings are independent over time, calculate the actual profit made over the six-month period and determine the annualized volatility of the stock’s earnings.

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