Question

Consider the following annual returns of Molson Coors and International Paper: Year 1 Year 2 Year 3 Year 4 Year 5 Molson Coors 24.3% -10.0 44.5 -10.1 17.8 International Paper 6.13 -19.1 -0.9 28.2 -12.7 Compute each stock's average return, standard deviation, and coefficient of variation. (Round your answers to 2 decimal places.) Molson Coors 13.30 % International Paper 0.32 % Average return Standard deviation Coefficient of variation Which stock appears better? International Paper Molson Coors

Answer 1

year returns Molson coors International paper 24.30% 6.10% -10.00% - 19.10% 44.50% -0.90% - 10.10% 28.20% 17.80% -12.70% 13.30% 0.32% Molson coors deviation deviation 2 (returns-average) 11.00% 1.2100% -23.30% 5.4289% 31.20% 9.7344% -23.40% 5.4756% 4.50% 0.2025% variance = 0.05513 International paper deviation deviation 2 (returns-average) 5.78% 0.3341% -19.42% 3.7714% -1.22% 0.0149% 27.88% 7.7729% -13.02% 1.6952% variance = 0.03397 average return standard deviation = 1. variance 10.5 23.48% standard deviation = 18.43% Molson Coors 13.30% 23.48% International Paper 0.32% 18.43% Average return Standard deviation Coefficient of variation 1.77 57.60 stand (Standard deviation/Mean) Molson coors appears better