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18.7 Suppose you observe the following month-end stock prices for stocks A and B: Day 2 0 1 3 4 100 105 102 100 Stock
18.7 Suppose you observe the following month-end stock prices for stocks A and B: Day 2 0 1 3 4 100 105 102 100 Stock A Stock B 97 97 100 105 150 100 For each stock: a. Compute the mean monthly continuously compounded return. What is the annual return? b. Compute the mean monthly standard deviation. What is the annual standard deviation? c. Evaluate the statement: The estimate of the mean depends only on the beginning and ending stock prices; the estimate of the standard deviation depends on all prices
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