Where Would You Invest Your Money? Let\'s look at several sets of stock prices T

Question

Where Would You Invest Your Money? Let's look at several sets of stock prices The following prices were obiained from hissorical records from 2009, and are listed in dollars per share. Stock Prices iB7, 12.25, 13.08 L. Find the mean of cach set of stock prices 2. Findthemedianofeachser ofmkprees. 50.5)14)13Coco-Caba 3. Calculate the variance and standard deviation of each set of stock prices . If you have $10,000 to invest, what stock would you buy under the Sollowing Caca- 92.27 14.08 · Justify your reasoning a. You are nearing retirement and need a stable investment for the future. b. You are a wealthy entrepreneur hoping to make a large profit in a short amount of time.

Explanation / Answer

1, 2 and 3)

4a)

To go for stable investment, you should invest in stock which has the least deviation. Here, the stock with the least deviation is General Electric and hence that should be preferred.

4b)

More fluctuations in a stock can give you high risk but also high returns. Here, the highest deviation in a stock is with Bank of America and hence that should be preferred.

Coca Cola Bank of America General Electric 45 7 12 44 4 9 52 7 10 52 9 13 49 11 13 55 13 12 57 15 13 54 18 14 48 17 16 45 15 14 47 16 16 54 15 15 50.16666667 12.25 13.08333333 Mean 50.5 14 13 Median 19.42424242 20.75 4.628787879 Variance 4.407294229 4.55521679 2.1514618 SD

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