Question

ASSET X -  

YEAR	RETURN	AVERAGE RETURN
1	10	16.00
2	2	16.00
3	8	4.00
4	4	4.00
5	6	0.00
6	2	16.00
7	10	16.00
8	8	4.00
9	6	0.00
10	4	4.00
TOTAL	60	80.00
AVERAGE RETURN =	6
VARIANCE =	8
STANDARD DEVIATION =	2.83

RISK AND RETURN –

(A) Candy is buying only one investment asset and her choice is the Asset X (ABOVE IN CHART), or an asset that paid an average return over the past ten years of 5.8 percent and had a standard deviation of 0 percent. What factors will affect Candy’s decision? (PLEASE INCLUDE FORMULAS USED TO SOLVE PROBLEM FOR EXCEL).

Answer 1