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During the past five years, you owned two stocks that had the following annual rates of...

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Finance

During the past five years, you owned two stocks that had thefollowing annual rates of return:

YearStock TStock B
10.170.10
20.060.02
3-0.06-0.12
4-0.040.04
50.110.06
  1. Compute the arithmetic mean annual rate of return for eachstock. Round your answers to one decimal place.

    Stock T:   %

    Stock B:   %

    Which stock is most desirable by this measure?

    -Select-Stock TStock BItem 3 is more desirable because thearithmetic mean annual rate of return is -Select-higherlowerItem 4.

  2. Compute the standard deviation of the annual rate of return foreach stock. (Use Chapter 1 Appendix if necessary.) Do not roundintermediate calculations. Round your answers to three decimalplaces.

    Stock T:   %

    Stock B:   %

    By this measure, which is the preferable stock?

    -Select-Stock TStock BItem 7 is the preferable stock.

  3. Compute the coefficient of variation for each stock. (Use theChapter 1 Appendix if necessary.) Do not round intermediatecalculations. Round your answers to four decimal places.

    Stock T:

    Stock B:

    By this relative measure of risk, which stock is preferable?

    -Select-Stock TStock BItem 10 is the preferable stock.

  4. Compute the geometric mean rate of return for each stock. Roundyour answers to three decimal places.

    Stock T:   %

    Stock B:   %

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