The following shows the expected percentage returns on three stocks over the next six years: Stock Percentage Return (%) Year 1 2. 3 4 6 A 10 8. 12 15 B 8. 4 4.8 6.4 9.6 12 10 12 10 6 6 Required: (i) (ii) (ii) Find the expected return for each of the stock. Compute the variance and standard deviation for stock A, B and C. Show your workin Justify how can you minimize the risk of the above combination of stocks.

Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter8: Time Series Analysis And_forecasting
Section: Chapter Questions
Problem 16P: The following table reports the percentage of stocks in a portfolio for nine quarters: a. Construct...
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(b) Explain any three (3) costs and benefits of partnerships/proprietorships as compared to corporation. Give your opinion which type of organizational structure is preferable.

The following shows the expected percentage returns on three stocks over the next six years:
Stock
Percentage Return (%)
Year
2.
3
4
A
10
6
8
12
15
В
8
4
4.8
6.4
9.6
12
10
12
10
6.
6.
Required:
(i)
(ii)
(iii)
Find the expected return for each of the stock.
Compute the variance and standard deviation for stock A, B and C. Show your working.
Justify how can you minimize the risk of the above combination of stocks.
Transcribed Image Text:The following shows the expected percentage returns on three stocks over the next six years: Stock Percentage Return (%) Year 2. 3 4 A 10 6 8 12 15 В 8 4 4.8 6.4 9.6 12 10 12 10 6. 6. Required: (i) (ii) (iii) Find the expected return for each of the stock. Compute the variance and standard deviation for stock A, B and C. Show your working. Justify how can you minimize the risk of the above combination of stocks.
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