1.a The stock prices for Wal-Mart and Target are shown below for the start of each year since 2001. Calculate each year's percentage return for each stock. 1.b. Please graph the annual rates of return for each company with time on the horizontal axis and rate of retun on the vertical. 1.c. Can you tell from the graph which stock has the highest average returns? Which seems to have the most variable returns? [There isn't really a right answer here.] 1.c. Can you tell from the graph which stock has the highest average returns? Which seems to have the most variable returns? [There isn't really a right answer here.] 1.d. Now calculate the average annual returns - both arithmetic and geometric - for the two stocks. 1.e. Explain how the meanings of the arithmetic and geometric averages differ? When would we prefer to use the simple average? When would we want to use the compound average? 1.f. Calculate the standard deviations of the returns for Wal-Mart and Target. 1.g Calculate the Coefficient of Variation (CV) of each stock's returns. CV of returns for Wal-Mart CV of returns for Target 92 94 1.i. Which stock would you choose to invest in? Explain. (HINT - There is no right answer here) 1.a The stock prices for Wal-Mart and Target are shown below for the start of each year since 2001. Calculate each year's percentage return for each stock. 1.b. Please graph the annual rates of return for each company with time on the horizontal axis and rate of retun on the vertical. 1.c. Can you tell from the graph which stock has the highest average returns? Which seems to have the most variable returns? [There isn't really a right answer here.] 1.c. Can you tell from the graph which stock has the highest average returns? Which seems to have the most variable returns? [There isn't really a right answer here.] 1.d. Now calculate the average annual returns - both arithmetic and geometric - for the two stocks. 1.e. Explain how the meanings of the arithmetic and geometric averages differ? When would we prefer to use the simple average? When would we want to use the compound average? 1.f. Calculate the standard deviations of the returns for Wal-Mart and Target. 1.g Calculate the Coefficient of Variation (CV) of each stock's returns. CV of returns for Wal-Mart CV of returns for Target 92 94 1.i. Which stock would you choose to invest in? Explain. (HINT - There is no right answer here)