In the excel spreadsheet go to Module 3 Questions 4-6

QUESTION 4 – STOCK 1:Mean (Average): Standard Deviation:

QUESTION 4 – STOCK 2:Mean (Average): Standard Deviation:

Directions: (Question 4)

Calculate the mean and standard deviation for the Adj Close price.  The formula for the mean is =AVERAGE() and the formula for the standard deviation is =STDEV.S()  You should type these formulas into the appropriate cells and highlight the data for which you want to generate these statistics.

QUESTION 5: Based on the standard deviation alone, can you make any conclusions about the relative risk of the two stocks?

QUESTION 6: Given the risk, what can you say about the relative expected return of the two stocks?