Xerox and Yirox are big names in the Food industry. The following data are for the actual
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Question:
- Xerox and Yirox are big names in the Food industry. The following data are for the actual returns on shares of Xerox (X) and that of Yirox (Y):
Year Stock X’s Returns, rX Stock Y’s Returns, rY | Stock X’s Returns, rX | Stock Y’s Returns, rY |
2015 | (24.25%) | 5.50% |
2016 | 18.50 | 26.73 |
2017 | 38.67 | 48.25 |
2018 | 14.33 | (4.5) |
2019 | 39.13 | 43.86 |
- Calculate the average rate of return for each stock during the period 2015 through 2019.
- Assume that someone held a portfolio consisting of thrice as many shares of Stock X than that of Stock
Y. What would be the expected return of this portfolio investment?
- Now calculate the standard deviation of return for the portfolio.
- Calculate the coefficient of variation of this portfolio investment.
- Interpret the coefficient of variation of the portfolio to help make sound decision.
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