Amy is looking into investing a portion of her recent bonus into the stock market. While researching different companies, she discovers the following standard deviations of one year of daily stock closing prices. Masterful Pocketwatches: Standard deviation of stock prices =$1.23 Eye Remember Enterprises: Standard deviation of stock prices =$9.72 Based on the data and assuming these trends continue, which company would give Amy a stable long-term investment?
Amy is looking into investing a portion of her recent bonus into the stock market. While researching different companies, she discovers the following standard deviations of one year of daily stock closing prices. Masterful Pocketwatches: Standard deviation of stock prices =$1.23 Eye Remember Enterprises: Standard deviation of stock prices =$9.72 Based on the data and assuming these trends continue, which company would give Amy a stable long-term investment?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Amy is looking into investing a portion of her recent bonus into the stock market. While researching different companies, she discovers the following standard deviations of one year of daily stock closing prices. Masterful Pocketwatches: Standard deviation of stock prices =$1.23 Eye Remember Enterprises: Standard deviation of stock prices =$9.72 Based on the data and assuming these trends continue, which company would give Amy a stable long-term investment?
Transcribed Image Text:Masterful Pocketwatches; the smaller standard deviation indicates that Masterful Pocketwatches has a greater mean closing price than Eye
Remember Enterprises.
O
Eye Remember Enterprises; the larger standard deviation indicates that Eye Remember Enterprises has a greater mean closing price than
Masterful Pocketwatches.
O
Eye Remember Enterprises; the larger standard deviation indicates that Eye Remember Enterprises has less variability in its closing prices than
Masterful Pocketwatches.
O
Masterful Pocketwatches; the smaller standard deviation indicates that Masterful Pocketwatches has less variability in its closing prices than Eye
Remember Enterprises.
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