Rate of return, standard deviation, coefficient of variation Personal Finance Problem 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 retums below 1.17. Mike has obtained the following price information for the period 2012 through 2015: B Hi-Tech stock, being growth-oriented, did not pay any dividends during these 4 years. a. Calculate the rate of return for each year, 2012 through 2015, for Hi-Tech stock. b. Assume that each year's return is equally probable and calculate the average return over this time period. c. Calculate the standard deviation of returns over the past 4 years. (Hint: Treat this data as a sample.) d. Based on band c determine the coefficient of variation of returns for the security. e. Given the calculation in d what should be Mike's decision regarding the inclusion of Hi-Tech stock in his portfolio? a. The rate of return for year 2012 is %. (Round to two decimal places.) The rate of return for year 2013 I8% (Round to two decimal places.) The rate of return for year 2014 is %. (Round to two decimal places.) The rate of return for year 2015 is %. (Round to two decimal places.) b. The average retum over this time period is % (Round to two decimal places.) c. The standard deviation of returns over the past 4 years is %. (Round to two decimal places.) d. The coefficient variation of retums for Hi-Tech stock is (Round to two decimal places.) e. Given the calculation in d what should be Mike's decision regarding the inclusion of Hi-Tech stock in his portfolio? (Select the best answer below.) O Mike will include Hi-Tech stock in his portfolio because the coefficient of variation of the security is below 1.17. O Mike will not include Hi-Tech stock in his portfolio because the coefficient of variation of the security is not below 1.17. End Year 2012 2013 2014 2015 Stock price Beginning $14.54 $20.44 $64.13 $71.61 $20.44 $64.13 $71.61 $91.15