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During the past five years, you owned two stocks that had the following annual rates of return: Year Stock T Stock B 1 0.19 0.06

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During the past five years, you owned two stocks that had the following annual rates of return: Year Stock T Stock B 1 0.19 0.06 2 0.10 0.06 3 -0.11 -0.05 4 -0.02 0.02 5 0.13 0.04 a. Compute the arithmetic mean annual rate of return for each stock. Round your answers to one decimal place. Stock T: % Stock B: % Which stock is most desirable by this measure? -Select- is more desirable because the arithmetic mean annual rate of return is -Select- b. Compute the standard deviation of the annual rate of return for each stock. (Use Chapter 1 Appendix if necessary.) Do not round intermediate calculations. Round your answers to three decimal places. Stock T: % Stock B: % By this measure, which is the preferable stock? -Select- is the preferable stock. C. Compute the coefficient of variation for each stock. (Use the Chapter 1 Appendix if necessary.) Do not round intermediate calculations. Round your answers to four decimal places. Stock T: Stock B: By this relative measure of risk, which stock is preferable? -Select- is the preferable stock. d. Compute the geometric mean rate of return for each stock. Round your answers to three decimal places. Stock T: % Stock B: %

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