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Q2) Consider the following information given below and do the following; a) Estimate monthly expected returns and the associated risk (Standard devistion) for each of
Q2) Consider the following information given below and do the following; a) Estimate monthly expected returns and the associated risk (Standard devistion) for each of the company A,B C securities b) Rank securities of company A, B, and C from the most preferred to the least preferred, assuming that the rational investor behavior holds. Year 1 2 Return of Company A 4.20% -2.71% 4.15% 3.68% Return of Company B 4.08% -2.73% 18.12% 1.60% Return of Company C 1.07% -5.44% 0.74% -10.78% 3 4 Marks (6+3=9) Q2) Consider the following information given below and do the following; a) Estimate monthly expected returns and the associated risk (Standard devistion) for each of the company A,B C securities b) Rank securities of company A, B, and C from the most preferred to the least preferred, assuming that the rational investor behavior holds. Year 1 2 Return of Company A 4.20% -2.71% 4.15% 3.68% Return of Company B 4.08% -2.73% 18.12% 1.60% Return of Company C 1.07% -5.44% 0.74% -10.78% 3 4 Marks (6+3=9)
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