Question
Consider the following returns for two investments, A and B, over the past four years: Investment 1: 4% 9% 8% 13% Investment 2: 15% 12%
| Consider the following returns for two investments, A and B, over the past four years: |
| Investment 1: | 4% | 9% | 8% | 13% |
| Investment 2: | 15% | 12% | 14% | 10% |
| a-1. | Calculate the mean for each investment.(Round your answers to 2 decimal places.) |
| Mean | |
| Investment 1 | percent |
| Investment 2 | percent |
| a-2. | Which investment provides the higher return? | ||
|
| b-1. | Calculate the standard deviation for each investment.(Round your answers to 2 decimal places.) |
| Standard Deviation | |
| Investment 1 | |
| Investment 2 |
| b-2. | Which investment provides less risk? | ||
|
| c-1. | Given a risk-free rate of 1.4%, calculate the Sharpe ratio for each investment.(Do not round intermediate calculations. Round your answers to 2 decimal places.) |
| Sharpe Ratio | |
| Investment 1 | |
| Investment 2 |
| c-2. | Which investment has performed better? | ||
|
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Probability and Random Processes With Applications to Signal Processing and Communications
Authors: Scott Miller, Donald Childers
2nd edition
123869811, 978-0121726515, 121726517, 978-0130200716, 978-0123869814
