You plan to invest in ABC and XYZ stocks. ABC shares do not pay dividends, while XYZ shares make regular dividend payments. the following is historical stock price data that you collect for your analysis:

a. Calculate the arithmetic average and geometric average returns from 2016  2020. b. In 2020, you invest and buy $10000 of ABC stock and $22000 of XYZ stock. There is a 30% chance of a recession as new variants of COVID-19 are still arriving and the normal probability is 50%. You have an expectation that the rate of return during a crisis period will be 5% lower than normal conditions, whereas during a boom the rate of return is 5% higher than normal. Calculate the expected return, standard deviation for stocks ABC and XYZ. And also calculate the expected return of the portfolio. c. After doing the analysis, which stock would you choose to invest in? Why? Explain.

Price (in Dollar) Year ABC Share XYZ Share XYZ Dividen 2016 100 110 2017 120 110 20 2018 125 110 25 2019 140 110 35 2020 150 110 40