In: Finance
During the past five years, you owned two stocks that had the following annual rates of return:
Year | Stock T | Stock B | ||
1 | 0.17 | 0.10 | ||
2 | 0.06 | 0.02 | ||
3 | -0.06 | -0.12 | ||
4 | -0.04 | 0.04 | ||
5 | 0.11 | 0.06 |
Stock T: %
Stock B: %
Which stock is most desirable by this measure?-Select-Stock TStock BItem 3 is more desirable because the arithmetic mean annual rate of return is -Select-higherlowerItem 4 .
Stock T: %
Stock B: %
By this measure, which is the preferable stock?-Select-Stock TStock BItem 7 is the preferable stock.
Stock T:
Stock B:
By this relative measure of risk, which stock is preferable?-Select-Stock TStock BItem 10 is the preferable stock.
Stock T: %
Stock B: %
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.