Question

In: Statistics and Probability

During a 5-week period in 2007, the stock of an insurance company and the stock of...

During a 5-week period in 2007, the stock of an insurance company and the stock of a small tech company showed the following weekly percentage changes.

Company Weekly Price Change (%)
Insurance Stock 2 -1 -1.7 0.6 -0.3
Tech Stock 3 2.2 1.3 -4.3 1.7


Find the variance of the weekly price changes of each. (Round your answers to four decimal places.)

insurance stock
tech stock

Relate the two variances found to the riskiness of the two stocks.

The two stocks have the same riskiness.The insurance stock is riskier.    No statement about the riskiness of these stocks can be made.The tech stock is riskier.

Solutions

Expert Solution

Variance for

insurance stock =2.0770
tech stock =8.4670

The tech stock is riskier.

orchestra answered 1 year ago
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