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Bxercise 5 8 you owned two stocks that had the following annual mates of return: table [ [ Year Stock T , Stock B
Bxercise
you owned two stocks that had the following annual mates of return:
tableYear Stock TStock B
a Compute the arithmetic mean annual rate of retum for each stock. Which stock is most desirable by this measure?
b Compute the standard deviation of the annual rate of return for each stock. By this measure, which is the preferable stock?
c Compute the coefficient of variation for each stock. By this relative measure of risk, which stock is preferable?
d Compute the geometric mean rate of return for each stock. Discuss the difference between the arithmetic mean return and the geometric mean retum for each stock,
c Discussithe differences in the mean retums relative to the standard deviation of the retum for each stock.
f Do you consider Stock or stock to present greater risk? Discuss your reasoning.
g Will you consider compose a portfolio using these two stocks? Explain
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