Exercise $5$:

you owned two stocks that had the following annual rates of return:

$\backslash$table$[[$Year$,$Stock T$,$Stock B$],[1,0\mathrm{.}19,0\mathrm{.}08],[2,0\mathrm{.}08,0\mathrm{.}03],[3,-0\mathrm{.}12,-0\mathrm{.}09],[4,-0\mathrm{.}03,0\mathrm{.}02],[5,0\mathrm{.}15,0\mathrm{.}04]]$

a$)$ Compute the arithmetic mean annual rate of return 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 return for each stock,

e$)$ Discuss the differences in the mean returns relative to the standard deviation of the return for each stock.

f$)$ Do you consider Stock $T$ or stock B to present greater risk? Discuss your reasoning.

g$)$ Will you consider compose a portfolio using these two stocks? Explain