Question

Consider the following annual returns of Estée Lauder and Lowe's Companies: Year 1 Year 2 Year 3 Estée Lauder 23.48 -26.0 17.6 49.9 -16.8 Lowe's Companies -6.0% 16.1 4.2 48.0 -19.0 Year 5 Compute each stock's average return, standard deviation, and coefficient of variation. (Round your answers to 2 decimal places.) Estée Lauder Lowe's Companies % Average return Standard deviation Coefficient of variation s Which stock appears better? Lowe's Companies Estée Lauder

Answer 1

for Estee

Year	return (x)	(x-mean)^2
1	23.40%	0.03023251563
2	-26.00%	0.1024800156
3	17.60%	0.01342701563
4	49.90%	0.1926112656
5	-16.80%	0.05204101563
Sum	48.10%	0.3907918281
	Average return	6.01%
	variance	0.09769795703
	standard deviation	31.26%

for Lowes

Year	return (x)	(x-mean)^2
1	-6.00%	0.01302451563
2	16.10%	0.01142226563
3	4.20%	0.000147015625
4	48.00%	0.1813695156
5	-19.00%	0.05959701563
Sum	43.30%	0.2655603281
	Average return	5.41%
	variance	0.06639008203
	standard deviation	25.77%