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 returns below 1.12. Mike has obtained the following price information for the period 2012 through 2015: Hi-Tech stock, being growth-oriented, did not pay any dividends during these 4 years. X 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 b and 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? Data Table a. The rate of return for year 2012 is %. (Round to two decimal places.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) The rate of return for year 2013 is %. (Round to two decimal places.) The rate of return for year 2014 is %. (Round to two decimal places.) Stock price Beginning $14.43 $21.23 $64.51 $72.14 The rate of return for year 2015 is Year 2012 2013 2014 2015 %. (Round to two decimal places.) End $21.23 $64.51 $72.14 $90.47 b. The average return 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.) Print Done d. The coefficient of variation of returns 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 O Mike will include Hi-Tech stock in his portfolio because the coefficient of variation of the security is below 1.12. Mike will not include Hi-Tech stock in his portfolio because the coefficient of variation of the security is not below 1.12