Question
In: Finance
During the past five years, you owned two stocks that had the following annual rates of...
During the past five years, you owned two stocks that had the following annual rates of returns
| year | Stock x | Stock y |
|---|---|---|
| 1 | 0.19 | 0.08 |
| 2 | 0.08 | 0.03 |
| 3 | -0.12 | -0.09 |
| 4 | -0.03 | 0.02 |
| 5 | 005 | 0.04 |
a) Compute arithmetic mean annual rate of return for each stock. Which stock is most desirable by this measure?
b) Compute the standard deviation of the annual rate of return for each stock. By this measure, which is the peferable stock?
c) Compute the coefficient of variation for each stock By this relative measure of risk, which stock is preferable
d) Compute the geometric mean rate of return I for each stock Discuss the difference between the arithmetic mean return and the geometric mean return for each stock. Relate the differences in the mean returns to the standard deviation of the return for each stock.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
During the past five years, you owned two stocks that had the following annual rates of...
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
Compute the arithmetic mean annual rate of return for each
stock. Round your answers to one decimal place.
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...
During the past five years, you owned two stocks that had the following annual rates of return:
Problem 1-05 During the past five years, you owned two stocks that had the following annual rates of return: YearStock TStock B10.190.0620.090.063-0.06-0.074-0.030.0250.140.03a. Compute the arithmetic mean annual rate of return for each stock. Round your answers to one decimal place. Stock T: _______ % Stock B: _______ % Which stock is most desirable by this measure? _______ , is more desirable because the arithmetic mean annual rate of return is _______ . b. Compute the standard deviation of the annual...
8.) During the past five years, you owned two stocks that had the following annual rates...
8.) During the past five years, you owned two stocks that had
the following annual rates of return:
Year Stock T Stock
B
1 0.16 0.08
2 0.08 0.03
3 -0.12 -0.09
4 -0.03 0.02
5 0.15 0.04
a) compute the arithmetic mean annual rate of return for each
stock, which stock is most desirable by this measure?
b) Compute the standard deviation of the annual rate of return for
each stock. Which stock...
You have owned the following two stocks over the past 5 years Year Sock A's Price...
You have owned the following two stocks over the past 5
years
Year
Sock A's Price
Stock B's Price
2014
67
31
2013
46
25
2012
44
23
2011
50
18
2010
34
19
a. What is the standard deviation of a portfolio's return in
which 50% of your portfolio is in each stock? ( Hint: Calculate the
holding period return first)
Please show all work and finance formulas.
The annual returns of three stocks for the past seven years are given in the following...
The annual returns of three stocks for the past seven
years are given in the following table:
Year
Stock X
Stock Y
Stock Z
2011
3.00%
14.00%
19.00%
2012
9.00%
7.00%
11.00%
2013
12.00%
19.00%
5.00%
2014
19.00%
13.00%
12.00%
2015
23.00%
-7.00%
11.00%
2016
5.00%
-3.00%
7.00%
2017
10.00%
9.00%
14.00%
Determine the average return and the standard deviation of
returns for each stock. Which stock has the highest expected return
and which one has the highest risk?
Determine...
The following data on annual rates of return were collected from five stocks listed on the...
The following data on annual rates of return were
collected from five stocks listed on the New York Stock Exchange
(“the big board”) and five stocks listed on NASDAQ. Assume the
population standard deviations are the same. At the .10
significance level, can we conclude the annual rates of return are
higher on the big board?
NYSE
17.16
17.08
15.51
8.43
25.15
NASDAQ
15.80
16.28
16.21
17.97
7.77
Really important: Use Excel as
described in “How...
As a new analyst you have calculated the following annual rates of return for the stocks...
As a new analyst you have calculated the following annual rates
of return for the stocks of both Lauren Corporation and Raleigh
Industries
Year
Lauren rate of return
Kayleigh rate of return
2015
5
5
2016
12
15
2017
-11
5
2018
10
7
2019
12
-10
Compute average return, standard deviations, coefficient of
variation co-variances and correlations of the two stocks
Would a combination of Lauren and Kaleigh be good for
diversification?
Graph risk return relationship
Identify minimum variance...
As a new analyst, you have calculated the following annual rates of return for the stocks...
As a new analyst, you have calculated the following annual rates
of return for the stocks of both Lauren Corporation and Kayleigh
Industries.
Year Lauren’s Rate of Return Kayleigh’s Rate of Return
2007 5 5
2008 12 15
2009 −11 5
2010 10 7
2011 12 −10
Your manager suggests that because these companies produce similar
products, you should continue your analysis by computing their
covariance and coefficient of correlation. Calculate covariance and
correlation for both companies and explain, would...
The S&P 500 and Nohr Corp had the following returns over the past five years Year ...
The S&P 500 and Nohr Corp had the following returns over the
past five years
Year S&P
500
Nohr
.12
.23
.01
-.05
.18
.20
.09
.12
.10
.20
a. What was the mean AND standard
deviation of returns (population version)
for Nohr for the 5 years?
b. What was the beta of Nohr relative to the S&P 500?
c. What was the geometric mean return for Nohr
for the 5 years?
Identified a U.S. company that had a change in accounting principles within the past five years,...
Identified a U.S. company that had a change in accounting
principles within the past five years, discuss the accounting
principles that the identified company changed and explain the
major reasons why the company changed accounting principles. Give
your opinion on whether you believe the change in accounting
principles was to benefit the corporation or investors and
creditors
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