Riskiest base on standard deviation

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1. In late 2010, you purchased the common stock of a company that has reported earnings increases in nearly every quarter since your purchase. The price of the stock increased from $12 a share at the time of the purchase to a current level of $45.Notwith standing the success of the company, competitors are gaining much strengths Further, your analysis indicates that the stock may be over-priced based on your projection of future earnings growth. Your analysis however was the same one years ago and the earnings have continued to increase. Actions that you might take range from an outright sale of the stock (and the payment of capital gains tax)to doing nothing and continuing to hold the shares. You reflect on these choices as well as others actions that could be taken. Describe the various that you might take and their implications.

2.Which of the following securities is likely to be the most liquid according to this data? Explain?

Stock BID AS
R $39.43 $39.55
S 13.67 13.77
T 116.02 116.25

 

3.From the information below, compute the average annual return, variance, standard deviation, and coefficient of variation for each.
Asset Annual Returns
A 5%,10%15%,4%
B -6%, 20%,2%,-5%,10%
C 12%, 15%, 17%
D 10%- 10%, 20%-15%, 8%, -7%

Based on the answer from question three, which asset appears riskiest base on standard deviation? Based on coefficient of variation.

Reference no: EM1344492

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