Question

Consider the following annual returns of Molson Coors and International Paper: International Paper Molson Coors 18.35 - 8.8 38.5 - 7.7 16.6 Year 1 Year 2 Year 3 Year 4 Year 5 -17.9 27.0 -11.5 Compute each stock's average return, standard deviation, and coefficient of variation (Round your answers to 2 decimal places.) Molson Coors International Paper Average return Standard deviation Coefficient of variation Which stock appears better? International Paper Molson Coors

Answer 1

C89 - X fo =B89-$B$95 A D Square of deviation Year 88 89 0.005 90 Deviation from mean 0.069 -0.202 0.271 -0.191 0.052 91 3 4 92 93 94 Sum Molson 18.3% -8.8% 38.5% -7.7% 16.6% 56.9% 11.38% (56.9%/5) 0.03955 19.89% 0.041 0.074 0.036 0.003 0.158 Coefficient of variation 5 Coefficient of variation Standard deviation:Mean| 1.75 31.14%/10.06% (0.158/(5-1)) 95 Average return 96 97 Variance 98 Standard deviation 99 (root of variance) 100 Internati 101 Year onal 4.9% 103 -17.9% Deviation from mean 0.045 -0.183 -0.010 0.266 -0.119 Square of deviation 0.002 0.033 0.000 0.071 0.014 0.121 Coefficient of variation -0.6% 4 27.0% -11.5% 1.9% 102 2 104 3 105 106 5 107 Sum 108 Average return 109 110 Variance 111 Standard deviation 112 (root of variance) 113 Coefficient of variation Standard deviation:Mean| 1.88 23.48%/8.90% 0.38% (1.9%/5) 0.03013 17.36% (0.121/(5-1)) 114 Molson coors stock appears betters as it has lower COV

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