The following shows the expected percentage returns on three stocks over the next six years: Stock Percentage Return (%) Year 1 2 3 4 5 6 A 10 5 6 8 12 15 B 8 4 4. 80 6.4 9.6 12 C 5 10 12 10 6 6 Required: (i) Find the expected return for each of the stock. (ii) Compute the variance and standard deviation for stock A, B and C. Show your working. (iii) Justify how can you minimize the risk of the above combination of stocks. (Must show working method as well)
The following shows the expected percentage returns on three stocks over the next six years: Stock Percentage Return (%) Year 1 2 3 4 5 6 A 10 5 6 8 12 15 B 8 4 4. 80 6.4 9.6 12 C 5 10 12 10 6 6 Required: (i) Find the expected return for each of the stock. (ii) Compute the variance and standard deviation for stock A, B and C. Show your working. (iii) Justify how can you minimize the risk of the above combination of stocks. (Must show working method as well)
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter8: Time Series Analysis And_forecasting
Section: Chapter Questions
Problem 16P: The following table reports the percentage of stocks in a portfolio for nine quarters: a. Construct...
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The following shows the expected percentage returns on three stocks over the next six years:
Stock Percentage Return (%)
Year 1 2 3 4 5 6
A 10 5 6 8 12 15
B 8 4 4. 80 6.4 9.6 12
C 5 10 12 10 6 6
Required:
(i) Find the expected return for each of the stock.
(ii) Compute the variance and standard deviation for stock A, B and C. Show your working.
(iii) Justify how can you minimize the risk of the above combination of stocks. (Must show working method as well)
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