Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Annual returns of three stocks are given below. Two of them (Air America and Air Brazil) are airline stocks and one (Star Oil) is an

Annual returns of three stocks are given below. Two of them (Air America and Air Brazil) are airline stocks and one (Star Oil) is an oil stock. In general, when oil prices go up, airline company stocks go down and oil company stocks go up.

YEAR Air America Air Brazil Star Oil
2016 -28% 9% -2%
2017 30% -28% -5%
2018 7% 7% 9%
2019 -5% -2% -28%
2020 -2% -5% 30%
2021 9% 30% 7%

How much is the risk (i.e., sample annual standard deviation)? Notice that all three stocks have the same risk. Enter your answer in the following format: 0.1234 Hint: Answer is between 0.1718 and 0.2100

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

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

Own Your Money

Authors: Michela Allocca

1st Edition

0760381127, 978-0760381120

More Books

Students also viewed these Finance questions