Question
Question 5 (15 marks) The following are the annual returns for Large Co. and Small Co. as well as for the market, for the last
Question 5 (15 marks)
The following are the annual returns for Large Co. and Small Co. as well as for the market, for the last 10 years.
| Annual returns (%) | |||
| Year | Large | Small | Market |
| 1 | 13.00 | 15.00 | 6.00 |
| 2 | 8.00 | 16.00 | 5.00 |
| 3 | 1.00 | 4.00 | 4.00 |
| 4 | 8.00 | 2.00 | 5.00 |
| 5 | 9.00 | 12.00 | 8.00 |
| 6 | 6.00 | 10.00 | 7.00 |
| 7 | 12.00 | 8.00 | 9.00 |
| 8 | 8.00 | -2.00 | 8.00 |
| 9 | 12.00 | 12.00 | 10.00 |
| 10 | 5.00 | 16.00 | 8.00 |
Calculate the following:
| a. | Average annual rate of return for Large, Small and the market |
| b. | Standard deviation of the rate of return for Large, Small and the market |
| c. | Plot Large Co, Small Co and the market on a risk / return graph. Which asset or combination of asset would you invest in? Why? |
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The Future Of Money How The Digital Revolution Is Transforming Currencies And Finance
Authors: Eswar S. Prasad
1st Edition
0674258444, 978-0674258440
