Question: 4. You are given the returns for the following three stocks: Year Stock A Stock B Stock C 1 6% 3 % -22 % 2

4. You are given the returns for the following three stocks: Year Stock A Stock B Stock C 1 6% 3 % -22 % 2 6 5 20 3 7 6 15 4 5 7 9 5 6 6 6 Calculate the arithmetic return, geometric return, and standard deviation for each stock. 5. You bought a stock three months ago for $84.12 per share. The stock paid no dividends. The current share price is $92.35. a. What is the APR of your investment? b. What is the EAR of your investment? 6. Over the past four years, a stock produced returns of 12 percent, 24 percent, 5 percent, and 16 percent. What is the approximate probability that an investor in this stock will not lose more than 30 percent nor earn more than 41 percent in any one given year? Assume the stock returns follow normal distribution. 7. The rates of return on Cherry Jalopies, Inc., stock over the last five years were 17 percent, 12 percent, 6 percent, 5 percent, and 10 percent. Over the same period, the returns on Straw Construction Company's stock were 16 percent, 22 percent, 2 percent, 3 percent, and 12 percent. Calculate the variances and the standard deviations for Cherry and Straw

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