clearer picture!

Al Annual stock returns of alpha and beta C D Autoceste and 6) The possible annual percentage returns of the stocks of Alpha, Inc. and Beta, Inc, are distributed as shown in worksheet Q6. The means (expected anual returns), variances, and standard deviations have been calculated for each stock, as have the covariance and correlation of the returns a) Investors are generally concerned with both the return from an investment and the risk assumed. With this in mind, if you were to purchase only one of the two stocks, which one would you prefer? Explain your reasoning (this can be answered in just a sentence or two). b) Describe the association between the annual returns of these two stocks (again, just a sentence or two is necessary)? c) How might your answer to b) influence your decision to purchase shares in one or both of these companies? Would your answer change if the effect were reversed? MUSA Ann Benet 103 005 37 0.15 301 030 26 60 022 130 78 720 00 23 38 2 10 11 12 13 94 15 10 17 Mar Vaca A 20 1304 TO 54 1677 170 13 Covance Corsi 6) The possible annual percentage returns of the stocks of Alpha, Inc. and Beta, Inc. are distributed as shown in worksheet Q6. The means (expected annual returns), variances, and standard deviations have been calculated for each stock, as have the covariance and correlation of the returns. a) Investors are generally concerned with both the return from an investment and the risk assumed. With this in mind, if you were to purchase only one of the two stocks, which one would you prefer? Explain your reasoning (this can be answered in just a sentence or two). b) Describe the association between the annual returns of these two stocks (again, just a sentence or two is necessary)? c) How might your answer to b) influence your decision to purchase shares in one or both of these companies? Would your answer change if the effect were reversed? D E B Annual stock leturns of alpha and beta Annual retum of Alpha, Inc. 40.3 37.9 30.1 24.6 19.7 715 1213 Annual return of Beta, Inc. Probability -18.8 0.05 -9.5 0.15 1.3 0.30 6.9 0.22 13.0 0.13 22.6 0.09 35.8 0.06 1 2 3 4 15 16 17 18 19 Means Variance Std. Dev. Alpha 25.2 120.4 11.0 Beta 5.4 1577 12.6 Covariance Correlation -135.87 -0.9861