Answered

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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.a. Garden Statues Express: Standard deviation of stock prices = $9.65b. Masterful Pocketwatches: Standard deviation of stock prices = $1.05Based on the data and assuming these trends continue, which company would give Amy a stable long-term investment?

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The Garden Statues Express Company would give Donna a stable long-term investment

Which company would give Amy a stable long-term investment?

  • In finance, standard deviation (SD) is used to measure the level of risk of an investment. The purpose of SD is to know the market volatility or variability of an investment from its average market price when the SD is applied to the annual rate of return of that particular investment.  
  • The higher the standard deviation, that is when there is a wild movement of prices of an investment, the investment will be risky.
  • From the question, Perfect Plungers Plus the standard deviation of stock prices of Perfect Plungers Plus which is $9.65 is higher than the standard deviation of stock prices of The Garden Statues Express which is $1.05
  • This implies that the stock of Perfect Plungers Plus is riskier and more volatile than the stock of the Garden Statues Express Company Therefore, the Garden Statues Express Company would give Donna a stable long-term investment.

To learn more about long-term investment refer

https://brainly.com/question/14777003

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