In the excel spreadsheet go to Module 3 Questions 4-6
QUESTION 4 – STOCK 1:Mean (Average): Standard Deviation:
QUESTION 4 – STOCK 2:Mean (Average): Standard Deviation:
Directions: (Question 4)
Calculate the mean and standard deviation for the Adj Close price. The formula for the mean is =AVERAGE() and the formula for the standard deviation is =STDEV.S() You should type these formulas into the appropriate cells and highlight the data for which you want to generate these statistics.
QUESTION 5: Based on the standard deviation alone, can you make any conclusions about the relative risk of the two stocks?
QUESTION 6: Given the risk, what can you say about the relative expected return of the two stocks?