The following are annual rates of return for T-bills in Ghana and Share on the Ghana Stock exchange Year T-bill Shares on Ghana Stock Exchange 2016 0.063 0.150 2017 0.081 0.043 2018 0.076 0.374 2019 0.090 0.192 2020 0.085 0.106 a. Compute the arithmetic mean rate of return and standard deviation of rates of return for the two series. b. Discuss these two alternative investments in terms of their arithmetic average rates of return, their absolute risk, and their relative risk. c. Compute the geometric mean rate of return for each of these investments. Compare the arithmetic mean return and geometric mean return for each investment and discuss the difference between mean returns as related to the standard deviation of each series.
The following are annual
Year T-bill Shares on Ghana Stock Exchange
2016 0.063 0.150
2017 0.081 0.043
2018 0.076 0.374
2019 0.090 0.192
2020 0.085 0.106
a. Compute the arithmetic mean rate of return and standard deviation of rates of return for the two series.
b. Discuss these two alternative investments in terms of their arithmetic average rates of return, their absolute risk, and their relative risk.
c. Compute the geometric mean rate of return for each of these investments. Compare the arithmetic mean return and geometric mean
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
