The major stock market indexes had strong results in 2018. The mean one-year return for stocks in the S&P 500, a group of 500 very large companies, was -6.24% The mean one- year return for the NASDAGQ, a group of 3,200 small and medium-sized companies, was 2 000/ LIistL.
The major stock market indexes had strong results in 2018. The mean one-year return for stocks in the S&P 500, a group of 500 very large companies, was -6.24% The mean one- year return for the NASDAGQ, a group of 3,200 small and medium-sized companies, was 2 000/ LIistL.
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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Transcribed Image Text:Finance
The major stock market indexes had strong
results in 2018. The mean one-year return for
stocks in the S&P 500, a group of 500 very
large companies, was -6.24% The mean one-
year return for the NASDAQ, a group of 3,200
small and medium-sized companies, was
-3.88% Historically, the one-year returns are
approximately normally distributed, the
standard deviation in the S&P 500 is
approximately 20%, and the standard
deviation in the NASDAQ is approximately
30%. Repeat (a) through (d) for a stock in the
NASDAQ. f. Write a short summary on your
findings. Be sure to include a discussion of the
risks associated with a large standard
deviation.
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