QUESTION ONE

Stock A and B annual rates of return are outlined below. Your expertise in investment analysis is sought after.

Year	Stock A	Stock B
2005	0.15	0.04
2004	-0.03	0.02
2003	-0.12	-0.09
2002	0.08	0.03
2001	0.19	0.08

i) Calculate the Arithmetic Mean (AM) of each stock. (4 Marks)

ii) Calculate the Geometric Mean (GM) of each stock. (6 Marks)

iii) Compute Standard Deviation (SD) of each stock. State which stock you prefer given this parameter. (10 Marks)

iv) Compute the Coefficient of Variation (CV) for each stock. Interpret your computation stating your preferred stock. (5 Marks