Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The historical rotums for two investments - A and B-are summarized in the following table for the period 2016 to 2020 , Use the data

image text in transcribed
image text in transcribed
The historical rotums for two investments - A and B-are summarized in the following table for the period 2016 to 2020 , Use the data to answer the questions that follow. a. On the basis of a review of the return data, which investment appears to be more rishy? Why? b. Calculate the standard deviation for each investment's retums. c. On the basis of your calculations in part b, which investreent is more risky? Compare this conclusion to your coservation in part a. a. On the basis of a review of the retum data, which investment appears to be more risky? Why? (Choose the best answer below) A. The riskier investment appears to be irvestment A. with refurns that vary widely from the average relatwe to investment B, whose returns show less deviation from the average. B. The riskier investment appears to be investment B, with roturns that are closer to the averape relative to investment A, whose tebums are farther from the average. C. The fiskier investment appears to be irvestment B, with returns that vary widely from the average relative to investment A, whose returns show less deviation from the average. D. Investment A and investment B have equal risk because the average returns are the same. b. The standard deviation for investment A is %. (Round to two decimal placos.) The standard deviation for imvestment B is is. (Round to two decimal places.) c. On the basis of your calculations in part b, which investment is more risky? Compare this conclusion to your observation in part a. (Choose the best answer below.) A. Investment A is more risky than irvestment B, which confirms the conclusion reached in part a. B. Investment B is more risky than imvostment A, which confirms the conclusion reached in part a. C. Investrent B is more riaky than irvestment A, which does not support the conclusion reached in part a. D. Investment A is more risky than investment B, which does not support the conclusion reached in part a: Data table IUlick on tne icon Iocated on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) The historical rotums for two investments - A and B-are summarized in the following table for the period 2016 to 2020 , Use the data to answer the questions that follow. a. On the basis of a review of the return data, which investment appears to be more rishy? Why? b. Calculate the standard deviation for each investment's retums. c. On the basis of your calculations in part b, which investreent is more risky? Compare this conclusion to your coservation in part a. a. On the basis of a review of the retum data, which investment appears to be more risky? Why? (Choose the best answer below) A. The riskier investment appears to be irvestment A. with refurns that vary widely from the average relatwe to investment B, whose returns show less deviation from the average. B. The riskier investment appears to be investment B, with roturns that are closer to the averape relative to investment A, whose tebums are farther from the average. C. The fiskier investment appears to be irvestment B, with returns that vary widely from the average relative to investment A, whose returns show less deviation from the average. D. Investment A and investment B have equal risk because the average returns are the same. b. The standard deviation for investment A is %. (Round to two decimal placos.) The standard deviation for imvestment B is is. (Round to two decimal places.) c. On the basis of your calculations in part b, which investment is more risky? Compare this conclusion to your observation in part a. (Choose the best answer below.) A. Investment A is more risky than irvestment B, which confirms the conclusion reached in part a. B. Investment B is more risky than imvostment A, which confirms the conclusion reached in part a. C. Investrent B is more riaky than irvestment A, which does not support the conclusion reached in part a. D. Investment A is more risky than investment B, which does not support the conclusion reached in part a: Data table IUlick on tne icon Iocated on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions