Calculate the arithmetic mean rate of return for stock t

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Question - (a) During the past five years, you owned two stocks that had the following annual rates of return:

Year

Stock T

Stock B

1

0.22

0.10

2

0.11

0.05

3

-0.15

-0.11

4

-0.06

0.04

5

0.18

0.07

1. Calculate the arithmetic mean rate of return for stock T.

2. Calculate the arithmetic mean rate of return for stock B.

3. Calculate the geometric mean rate of return for stock T.

4. Calculate the geometric mean rate of return for stock B.

5. Calculate the standard deviation of the annual rate of return for stock T.

6. Calculate the standard deviation of the annual rate of return for stock B.

(b) List the four company types and discuss the main characteristics of each of them.

Reference no: EM133179426

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