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 2 years ago
Next > < Previous

Related Solutions

A company recorded the following production costs during the previous two-week period: Week 1 Week 2...
A company recorded the following production costs during the previous two-week period: Week 1 Week 2 Direct labor costs                     17,000          22,600 Other manufacturing costs                     25,000          31,400 Units produced                        5,000            7,000 Assuming both weeks fall in the same relevant range, what was the total fixed cost during Week 1?
Question 5 Week 9 (11 marks) (a) Jessica Ltd sold inventory during the current period to...
Question 5 Week 9 (a) Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for $8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are as follows: Required (i) Discuss whether the entries suggested by Li Chen are correct, explaining on...
During a given period, a stock had a realized return of 12%. During the same period,...
During a given period, a stock had a realized return of 12%. During the same period, the risk free rate of return was 6% and the market return was 9% and this stock's beta was 0.8. Calculate this stock's abnormal return during the period in question. Group of answer choices 3.6% (4.2%) (3.6%) 4.2%
Why did the USA have a great recession during 2007 to 2009 period? Was it cause...
Why did the USA have a great recession during 2007 to 2009 period? Was it cause by the financial crisis? Briefly explain. You may use parts of your research paper to answer the question.
Potter Company began operating in 2007. During 2007, it provided $308,000 in services to customers on...
Potter Company began operating in 2007. During 2007, it provided $308,000 in services to customers on account and collected 260,000 in cash from its accounts receivable. At the end of the year, it adjusted its accounts based on the estimate that 1% of the revenue on account would not be collected. Prepare the journal entries to record all transactions related to accounts receivable. Account titles: Debit: Credit: What was the net realizable value of Potter's accounts receivable at the end...
The current price of the stock of Bufflehead company is C$100. During each six-month period it...
The current price of the stock of Bufflehead company is C$100. During each six-month period it will either rise by 10% or fall by 10%. The interest rate is 6% per annum compounded semi-annually. a. Calculate the value of a one-year European put option on Bufflehead's stock with an exercise price of C$115. b. Recalculate the value of the Bufflehead put option, assuming that it is an American option.
Suppose it is mid-2007 and the stock market has been growing rapidly for the past 5...
Suppose it is mid-2007 and the stock market has been growing rapidly for the past 5 years. Some economists argue that the stock market has become “overvalued” and thus a “crash” is imminent How does a rising stock market affect Aggregate Demand? Show this in an AD/AS diagram. For a central bank that is trying to keep real GDP close to Potential explain what challenges are posed by a rapidly rising stock market Suppose the stock market crashes how does...
The patient came to your exercise sessions 80% of the time during the 8 week period....
The patient came to your exercise sessions 80% of the time during the 8 week period. Since she only needed to comply by 70%, she was granted the lap band surgery. After 12 weeks, she has lost 50 pounds and has eliminated her insulin and cholesterol medications but is still on the hypertension meds. Her knees also are starting to feel better. You meet with this person post-surgery for an exercise assessment and the post surgery program. This time, she...
The patient came to your exercise sessions 80% of the time during the 8 week period....
The patient came to your exercise sessions 80% of the time during the 8 week period. Since she only needed to comply by 70%, she was granted the lap band surgery. After 12 weeks, she has lost 50 pounds and has eliminated her insulin and cholesterol medications but is still on the hypertension meds. Her knees also are starting to feel better. You meet with this person post-surgery for an exercise assessment and the post surgery program. This time, she...
The patient came to your exercise sessions 80% of the time during the 8 week period....
The patient came to your exercise sessions 80% of the time during the 8 week period. Since she only needed to comply by 70%, she was granted the lap band surgery. After 12 weeks, she has lost 50 pounds and has eliminated her insulin and cholesterol medications but is still on the hypertension meds. Her knees also are starting to feel better. You meet with this person post-surgery for an exercise assessment and the post surgery program. This time, she...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT