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Problem 6: (14 points) Consider the following past annual returns of ABC and XYZ stocks: ABC XYZ 2018 8% -6% 2017 -3% 9.8% 2016 6%

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Problem 6: (14 points) Consider the following past annual returns of ABC and XYZ stocks: ABC XYZ 2018 8% -6% 2017 -3% 9.8% 2016 6% -10.1% a) Compute each stock's average return and standard deviation. (Hint: This is a sample, not a complete population, so the sample standard deviation formula should be used.) (10 points b) Which stock appears better? Why? Risk free is 1.5% (4points)

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