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17) The historical returns for two investmentsA and Bare summarized in the following table for the period 2016 to 2020. Use the data to answer
17) The historical returns for two investmentsA and Bare summarized in the following table for the period 2016 to 2020. Use the data to answer the questions that follow.
| A | B |
|
Year | Rate of Return | ||
2016 | 19% | 8% |
|
2017 | 1% | 10% |
|
2018 | 10% | 12% |
|
2019 | 26% | 14% |
|
2020 | 4% | 16% |
|
Average | 12% | 12% |
|
- On the basis of a review of the return data, which investment appears to be more risky? Why?
- Calculate the standard deviation for each investments returns.
- On the basis of your calculations in part b, which investment is more risky? Compare this conclusion to your observation in part a.
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