Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Donna is looking into investing a portion of her recent bonus into the stock market. While researching different companies, she discovers the following standard deviations

Donna is looking into investing a portion of her recent bonus into the stock market. While researching different companies, she discovers the following standard deviations of one year of daily stock closing prices. Masterful Pocketwatches: Standard deviation of stock prices =$9.83 Perfect Plungers Plus: Standard deviation of stock prices =$1.22 Based on the data and assuming these trends continue, which company would give Donna a stable long-term investment?

Answer Options

Masterful Pocketwatches; the larger standard deviation indicates that Masterful Pocketwatches has less variability in its closing prices than Perfect Plungers Plus.

Perfect Plungers Plus; the smaller standard deviation indicates that Perfect Plungers Plus has a greater mean closing price than Masterful Pocketwatches.

Masterful Pocketwatches; the larger standard deviation indicates that Masterful Pocketwatches has a greater mean closing price than Perfect Plungers Plus.

Perfect Plungers Plus; the smaller standard deviation indicates that Perfect Plungers Plus has less variability in its closing prices than Masterful Pocketwatches.

Step by Step Solution

3.46 Rating (149 Votes )

There are 3 Steps involved in it

Step: 1

Here as DOnna needa a stable long term investment opportunity then she mu... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Document Format ( 2 attachments)

PDF file Icon
60946dabbb047_24835.pdf

180 KBs PDF File

Word file Icon
60946dabbb047_24835.docx

120 KBs Word File

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: Jeff Madura

5th edition

132994348, 978-0132994347

More Books

Students also viewed these Finance questions

Question

What is ethics? LO56

Answered: 1 week ago

Question

In your opinion, is mental illness currently overdiagnosed?

Answered: 1 week ago

Question

What is the specific purpose of an acceptable use policy?

Answered: 1 week ago

Question

Describe how employer sponsored retirement plans work in general.

Answered: 1 week ago