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You observed the following daily returns for two companies: ABC and DEF. Daily Returns ABC                         ...

You observed the following daily returns for two companies: ABC and DEF.

Daily Returns

ABC                          DEF         

Monday             3%                           2%

Tuesday             2%                           8%

Wednesday       −8%                         14%

Thursday          –10%                       12%

Friday                  7%                         3%

Calculate, for each stock, the:

A. Geometric mean daily return

B. Arithmetic mean daily return

C. Standard deviation of daily returns                                      

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Answer #1
ABC DEF
3% 2%
3% 8%
-8% 14%
-10% 12%
7% 3%
Geomean -1.23% 7.70%
Arithemtic mean -1.00% 7.80%
Standard deviation 6.72% 4.75%

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