You are tasked with analysing the historical performance of two shares, Share A and Share B, over
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Question:
Year Share A Return (%) Share B Return (%)
1 10% 12%
2 8% 9%
3 -5% -4%
4 15% 18%
5 -2% 0%
6 12% 14%
1 Calculate the average annual return and standard deviation of returns for both Share A and Share B.
2 Explain the concept of standard deviation in the context of risk and return analysis.
3 Based on your calculations and understanding of risk and return, which of the two shares, Share A or Share B, is more volatile over the 6-year period? Provide a rationale for your answer.
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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