Question
Let two shares A and B, which in the last six weeks show the returns shown in the table below. 1st week 2nd week 3rd
Let two shares A and B, which in the last six weeks show the returns shown in the table below.
1st week | 2nd week | 3rd week | 4th week | 5th week | 6th week | |
Share A | 0.07 | 0.10 | -0.04 | 0.05 | -0.01 | -0.05 |
Share B | 0.11 | 0.01 | -0.08 | 0.12 | 0.08 | 0.14 |
A) Calculate the average return of shares A and B for the period of 6 weeks, using the arithmetic mean. B) Assuming that there is a portfolio that includes the 2 shares in equal percentages (50% - 50%), what is the average return of the portfolio? C) Calculate the risk (standard deviation) of shares A and B. Which share do you consider more dangerous based on the criterion of the coefficient of variation (CV)?
D) Participate in a retirement plan which gives you the following options for how to collect your pension. 1st choice: Annual installments of 11,000 euros for 20 years. 2nd option: Payment of 500,000 euros at the end of the investment horizon, ie in 0 years. Knowing that the nominal interest rate is equal to 7%, evaluate the two investments.
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