ReviewView Problem 4: The price of TSN, X and PM was 34.30, 25.15 and 81 on 1/22

Question

ReviewView Problem 4: The price of TSN, X and PM was 34.30, 25.15 and 81 on 1/22/2014. The box below contains prices for stocks TSN, X and PM over the next three trading days. Do not use Excel for this problem. Date PM 1/27/2014 34.65 25.45 80.78 1/24/2014 34.77 25.28 81.5 1/23/2014 35.4626.34 83.54 TSN a) Which stock performed the best? b) Which stock is the most volatile? c) Which two stocks moved more closely together over this period? d) Make an argument for buying TSN at the end of trading on 1/27/2014.

Explanation / Answer

a) After next 3 three trading days, X performed the best as it gives 1.19% return which is better than TSN and PM.

b) TSN stock is most volatile here as having maximum up and wown activite.

c) TSN and X moved more closely here over this period.

d)At end of 27th, TSN would give positive return. In 3 days, there is are less volatility in TSN, compared to others.

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