WK7- D: Mathematical Explorations – Descriptive Statics Investing in stocks can
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Question
WK7- D: Mathematical Explorations – Descriptive Statics
Investing in stocks can be risky. Depending on the amount invested, a person stands to lose or gain a significant amount of money. Because of this, people use various metrics and measures to determine whether or not to invest in a specific stock.
Answer the following:
1). You have been given $5000 to invest in any stock on any stock exchange. Select any stock from any exchange. Using TEN different stock prices over the past month, calculate the following:
A). mean price of the stock
B). the range of the ten stock prices
C). and the standard deviation.
2). Because the standard deviation is a measure of variation, based on the standard deviation explain why or why not you would invest in this particular stock.
Explanation / Answer
Feb 08, 2017
2) Variation in stocks shows how fluctuating a stock generally is and this shows and thus this shows how fast a person can make or lose money. Generally, risk taking people might want to invest in such stocks as they might fetch higher returns in a low period of time whereas at the same time might end up making losses in a less time. Risk averse people might not prefer to invest in such stocks.
Date Open High Low Close Adj Close (x) Volume (xi-x) (xi-x)^2Feb 08, 2017
131.35 132.22 131.22 132.04 132.04 2,30,04,100 5.331 28.41956 Feb 07, 2017 130.54 132.09 130.45 131.53 131.53 3,81,83,800 4.821 23.24204 Feb 06, 2017 129.13 130.5 128.9 130.29 130.29 2,68,45,900 3.581 12.82356 Feb 03, 2017 128.31 129.19 128.16 129.08 129.08 2,45,07,300 2.371 5.621641 Feb 02, 2017 127.98 129.39 127.78 128.53 128.53 3,37,10,400 1.821 3.316041 Feb 01, 2017 127.03 130.49 127.01 128.75 128.75 11,19,85,000 2.041 4.165681 Jan 31, 2017 121.15 121.39 120.62 121.35 121.35 4,92,01,000 -5.359 28.71888 Jan 30, 2017 120.93 121.63 120.66 121.63 121.63 3,03,77,500 -5.079 25.79624 Jan 27, 2017 122.14 122.35 121.6 121.95 121.95 2,05,62,900 -4.759 22.64808 Jan 26, 2017 121.67 122.44 121.6 121.94 121.94 2,63,37,600 -4.769 22.74336 Mean 126.709 SD (Population) 4.213016615 sqrt(xi-x)^2/n SD (Sample) 4.440909441 sqrt(xi-x)^2/n-1 Range 10.692) Variation in stocks shows how fluctuating a stock generally is and this shows and thus this shows how fast a person can make or lose money. Generally, risk taking people might want to invest in such stocks as they might fetch higher returns in a low period of time whereas at the same time might end up making losses in a less time. Risk averse people might not prefer to invest in such stocks.
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