Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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... blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Corporate Finance

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

10th edition

978-0077511388, 78034779, 9780077511340, 77511387, 9780078034770, 77511344, 978-0077861759

More Books

Students also viewed these Accounting questions