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Tech Stocks These data give the monthly returns on stocks in three technology companies: Dell, IBM, and Microsoft. For each month from January 1 9
Tech Stocks These data give the monthly returns on stocks in three technology companies: Dell, IBM, and Microsoft. For each month from January through the end of months the data give the return earned by owning a share of stock in each company. The return is the percentage change in the price, divided by
a Describe and contrast histograms of the three companies. Be sure to use a common scale for the data axes of the histograms to make the comparison easier and more reliable.
b Find the mean, SD and coefficient of variation for each set of returns. Are means and SDs useful summaries of variables such as these?
c What does comparison of the coefficients of variation tell you about these three stocks?
d Investors prefer stocks that grow steadily. In that case, what values are ideal for the mean and SD of the returns? For the coefficient of variation?
e It is common to find that stocks that have a high average return also tend to be more volatile, with
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