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136 uest Rate of return, standard deviation, coefficient of variation Personal Finance Problem Mike is searching for a stock to include in his current stock
136 uest Rate of return, standard deviation, coefficient of variation Personal Finance Problem Mike is searching for a stock to include in his current stock portfolio. He is interested in Hi-Tech Inc; he has been impressed with the company's computer products and believes Hi-Tech is an innovative market player. However, Mike realizes that any time you consider a technology stock, risk is a major concor. The rule he follows is to include only securities with a coefficient of variation of returns below 1.17 Mike has obtained the following price information for the period 2015 through 2018 Hi-Toch stock, being growth-oriented, did not pay any dividends during those 4 years, a. Calculate the rate of return for each year, 2015 through 2018, for Hi-Tech stock b. Assume that each year's return is equally probable and calculate the average rotum over this time period, c. Calculate the standard deviation of returns over the past 4 years. (Hint Treat this data as a sample) d. Based on bande determine the coefficient of variation of returns for the security e. Given the calculation in d what should be Mike's decision regarding the inclusion of Hi-Tech stock in his portfolio? a. The rate of return for your 2015 is []%. (Round to two decimal places) ta table Click on the icon here in order to copy the contents of the data table below to a spreadsheet.) Year 2015 2016 2017 2018 Stock price Beginning $14.61 $20.53 $64.61 $72.06 End $20.53 $64.61 $72.06 $91.24 Print Done
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