Question
Pam is an investor who believes that past variability of stocks is a reasonably good estimate of future risk associated with the stocks. Pam
Pam is an investor who believes that past variability of stocks is a reasonably good estimate of future risk associated with the stocks. Pam works on creating a new portfolio and has already purchased stock A. Now she considers two other stocks, B and C. Pam collected data on the historic rates of return for all three stocks, which are presented in the following table. Complete the table by calculating standard deviations for each stock: Year 2015 2016 2017 2018 Average return Estimated standard deviation Stock A 30% 25% -5% -10% 10% 20.41% Stock B 25% 30% -10% -5% 10% 20.41% Stock C -10% -5% 30% 25% 10% 20.41%
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Investments An Introduction
Authors: Herbert B Mayo
9th Edition
324561385, 978-0324561388
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