suppose the following information represents the return for General Motors (GM) and American Telephone & Telegraph...

70.2K

Verified Solution

Question

Finance

suppose the following information represents the return forGeneral Motors (GM) and American Telephone & Telegraph (ATT)common stocks over a five-year period: Year Revenue GM ATT 1 10%12% 2 4 6 3 -9 -10 4 20 22 5 5 5 a) what is the mean return for theGM common stock? what is it for ATT common stock? b) what is thevariance of the return for GM common stock? what is it for the ATTcommon stock? c) what is the standard deviation of the return forGM common stock? what is it for the ATT common stock? d) supposethe returns for the GM and ATT have normally distributed returnswith means and standard deviations (SDs) calculated in problems b)and c) respectively. for each stock, determine the range of returnswithin one SD of the mean and the range within two SDs of the mean.Interpret the results. e) Given the data from previous answers,what is the probability that, in any given year, the return for GMcommon stock will be negative? What is the probability that the ATTreturn will be negative? ASKING ABOUT D) AND E).

Answer & Explanation Solved by verified expert

3.7 Ratings (423 Votes)

Answer a to cUsing excel formula Mean Variance and Standard deviation SDare calculated as belowThe excel with show formula is as belowAnswer dMean oneSDGM Stock6 1051GM stock Range of returns within one SD of the mean forGM stock is 451 to 1651 This implies that See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

suppose the following information represents the return forGeneral Motors (GM) and American Telephone & Telegraph (ATT)common stocks over a five-year period: Year Revenue GM ATT 1 10%12% 2 4 6 3 -9 -10 4 20 22 5 5 5 a) what is the mean return for theGM common stock? what is it for ATT common stock? b) what is thevariance of the return for GM common stock? what is it for the ATTcommon stock? c) what is the standard deviation of the return forGM common stock? what is it for the ATT common stock? d) supposethe returns for the GM and ATT have normally distributed returnswith means and standard deviations (SDs) calculated in problems b)and c) respectively. for each stock, determine the range of returnswithin one SD of the mean and the range within two SDs of the mean.Interpret the results. e) Given the data from previous answers,what is the probability that, in any given year, the return for GMcommon stock will be negative? What is the probability that the ATTreturn will be negative? ASKING ABOUT D) AND E).