Question # 12: Mike is searching for a stock to include in his current stock portfolio. He is interested in Hi-Tech Inc.; he has been impressed with the company's computer products and believes Hi-Tech is an innovative market player. However, Mike realizes that any time you consider a technology stock, risk is a major concern. The rule he follows is to include only securities with a coefficient of variation of returns below 0.90. Mike has obtained the following price information for the period 2009 through 2012. Hi-Tech stock, being growth-oriented, did not pay any dividends during these 4 years. Instructor: Bilal Ali Zafar Submission Date: December 31, 2020 ASSIGNMENT # 3 (Stock Valuation, Risk and Return) BS (A & F) Sec A Year 2009 2010 2011 2012 Stock price Beginning End $14.36 $21.55 21.55 64.78 64.78 72.38 72.38 91.80 a) Calculate the rate of return for each year, 2009 through 2012, for Hi-Tech stock. b) Assume that each year's return is equally probable, and calculate the average return over this time ppu c) Calculate the standard deviation of returns over the past 4 years. (Hint: Treat these data as a sampi d) Based on b and c determine the coefficient of variation of returns for the security, 3/4 e) Given the calculation in d what should be Mike's decision regarding the inclusion of Hi-Tech sto. portfolio