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 concem. The rule he follows is to include only securities with a coefficient of variation of returns below 1.03 Mike has obtained the following price information for the period 2015 through 2018: Hi-Tech stock, being growth oriented, did not pay any dividends during these 4 years Cancel a. Calculate the rate of return for each year, 2015 through 2018, 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? a. The rate of return for year 2015 is % (Round to two decimal places) The rate of return for year 2016 is % (Round to two decimal places) The rate of return for year 2017 is % (Round to two decimal places) The rate of return for year 2018 is % (Round to two decimal places) 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.) 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) Click to select your answer(s). 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 1.03 Mike has obtained the following price information for the period 2015 through 2018: Hi-Tech stock, being growth-oriented, did not pay any dividends during these 4 years a. Calculate the rate of return for each year, 2015 through 2018, 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? The rate of return for year 2017 is % (Round to two decimal places) The rate of return for year 2018 is % (Round to two decimal places) b. The average return over this time period is % (Round to two decimal places) c. The standard deviation of retums over the past 4 years is 3% (Round to two decimal places) 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) Mike will include Hi-Tech stock in his portfolio because the coofficient of variation of the security is below 1.03 Mike will not include Hi-Tech stock in his portfolio because the coefficient of variation of the security is not below 1.03 Click to select your answers). 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 concom. The rule he follows is to include only securities with a coefficient of variation of returns below 1.03 Mike has obtained the following price information for the period 2015 through 2018 Hi-Tech stock being growth-oriented, did not pay any dividends during these 4 years a. Calculate the rate of return for ead Data Table -X b. Assume that each year's return is c. Calculate the standard deviation d. Based on b and c determine the e. Given the calculation in d what she (Click on the icon located on the top-right comer of the data table below in order to The rate of return for year 2017 is copy its contents into a spreadsheet) Stock price The rate of return for year 2018 is Year Beginning End 2015 $14.93 $22 78 b. The average return over this time 2016 $22.78 $64 82 2017 $64.82 $72 37 c. The standard deviation of returns 2018 $7237 $91 25 d. The coefficient of variation of retur Print Done e. Given the calculation in d what she st answer below) Mike will include Hi-Tech stock in his portfolio because the coefficient of variation of the security is below 1.03 Mike will not include Hi-Tech stock in his portfolio because the coefficient of variation of the security is not below 1.03, Click to select your answer(s)
