Question
The stocks on ABC Company and XYZ Company have the following returns over the last four years. Year ABC Returns XYZ Returns 1 -0.2 0.05
The stocks on ABC Company and XYZ Company have the following returns over the last four years.
Year | ABC Returns | XYZ Returns |
1 | -0.2 | 0.05 |
2 | 0.5 | 0.09 |
3 | 0.3 | -0.12 |
4 | 0.1 | 0.2 |
a. Calculate the average return on ABC.
b. Calculate the average return on XYZ.
c. Calculate the variance and standard deviation on the ABC returns.
d. Calculate the variance and standard deviation on the XYZ returns.
e. Using the coefficient of variation (standard deviation/average return) to compare the two stocks, which stock is preferable?
Step by Step Solution
3.17 Rating (145 Votes )
There are 3 Steps involved in it
Step: 1
Year ABC returns XYZ returns 1 02 005 2 05 009 3 03 012 4 01 02 a Average return on ABC 020503014 01...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get StartedRecommended Textbook for
Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
10th edition
978-0077511388, 78034779, 9780077511340, 77511387, 9780078034770, 77511344, 978-0077861759
Students also viewed these Accounting questions
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
View Answer in SolutionInn App