Stock.xlsx shows the monthly stock returns of Microsoft(MSFT) and Apple(APPL) fr

Question

Stock.xlsx shows the monthly stock returns of Microsoft(MSFT) and Apple(APPL) fromD7 August 2011 to July 2016. Please use Excel to answer the following questions. a. Compute means of two stock returns. Use 'MEAN' function. Based on these numbers, which stock would you invest if you want to maximize your average monthly return? Apple0456 crosoft 0.0901 0.0718 'MAX' functions. c. Compute sample variances and sample standard deviations of two 0.02440.1399 0.0512 0.0733 0.00800.0427 0.0581 b. Compute medians and ranges of two stock returns. Use 'MEDIAN', 'MIN' and 0.0310 stock returns. Use 'VAR.S' and 'STDEV.S'. Based on these numbers, which stock would you invest if you want to minimize your risk? 0.1272 0.0752 0.0058 .0121 0,0013 0.0761 0.0640-0.1102 0.0168 0.2438 0.02250.0218 0.0281 0.0413 0.0 0.0615 0.0372 0.0212 0.0834 -0.0662 0.0453 0.0058 0.0807 0.0314 0.0543 0.1296 0.0000 0.0062 0.0469 0.0601-0.0171 0.0009 0.0357 0.0500 0.0028 -0.0084 0 0.1008 0.0614 0.0719 0.1060 0.0720 21 23 24 25 0.0775 0.0287 0.0277 0.0787 0.0994 0660 0.0200 0.0128 0.02100.1077 0.0133 0.1013 0.0904 0.0108 0.0813 0.1252 0.0223-0.1183 0.1069 0.1298 0.0493 0.02170.0253 0.0294 0.1441 0.00740.0907 0.0700.0124 0.0464 -0.10 0.0190 0.0381 -0.0037 0.0013 0.0670-0.0107 0.0132-0.0260 0.0195 0.0802 0.1533 0.0301 0.03330.0558 0.0222 0.1765 32 0.0575 34 0.0089 0.0701 0.0964 0.0215 0.0838 0.0224 0.0003 0.0029 0.0028 0.0939 0.0458 0.0109 52 54 0.1053 0.1883 0.1271 0.0597 0.0615 0.0091

Explanation / Answer

Solution: Calculation is done for given data using excel:

(a) Means of two stocks

Since average of Microsoft is better than Apple stocks. Therefore, we can invest in Microsoft for maximise frofit.

(b) Median, Range, variance and standard devation of two stocks

Based on minimum variance, we should invest in Microsoft for minimize risk.

Microsoft Apple Means 0.020375 0.015623

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