QUESTION 2 The following table contains data on the returns of stock A and stock B from 2021 to 2024: Year 2021 2022 2023 2024 Return on stock A 6 8 10 12 Return on stock B 13 10 14 11 1. Compute the mean return on stock A and the mean return on stock B; 2. Compute the variance of the return on stock A and the variance of the return on stock B; 3. Compute the standard deviation of the return on stock A and the standard deviation of the return on stock B; 4. Compute the coefficient of variation of the return on stock A and stock B; 5. Compute RRC for stock A and stock B (Hint: RRC 6. Would you invest in Stock A or Stock B? Why? Mean Return/Standard Deviation);
QUESTION 2 The following table contains data on the returns of stock A and stock B from 2021 to 2024: Year 2021 2022 2023 2024 Return on stock A 6 8 10 12 Return on stock B 13 10 14 11 1. Compute the mean return on stock A and the mean return on stock B; 2. Compute the variance of the return on stock A and the variance of the return on stock B; 3. Compute the standard deviation of the return on stock A and the standard deviation of the return on stock B; 4. Compute the coefficient of variation of the return on stock A and stock B; 5. Compute RRC for stock A and stock B (Hint: RRC 6. Would you invest in Stock A or Stock B? Why? Mean Return/Standard Deviation);
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:QUESTION 2
The following table contains data on the returns of stock A and stock B from 2021 to 2024:
Year
2021
2022
2023
2024
Return on stock A
6
8
10
12
Return on stock B
13
10
14
11
1. Compute the mean return on stock A and the mean return on stock B;
2. Compute the variance of the return on stock A and the variance of the return on stock B;
8. Compute the standard deviation of the return on stock A and the standard deviation of the
return on stock B;
4. Compute the coefficient of variation of the return on stock A and stock B;
5. Compute RRC for stock A and stock B (Hint: RRC = Mean Return/Standard Deviation);
6. Would you invest in Stock A or Stock B? Why?
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