SOLUTION: roblem Statement For this problem, you will be answering questions based on data for a fictional company ABC. Stock for company ABC had the following 12-month closing prices per

Question 1197604: roblem Statement
For this problem, you will be answering questions based on data for a fictional company ABC. Stock for
company ABC had the following 12-month closing prices per share.
Month 1 2 3 4 5 6 7 8 9 10 11 12
Closing
Price
$7.60 $7.80 $8 $9 $9.20 $9.40 $9.60 $10 $10.60 $11.80 $12.40 $14.20
Additional data for company ABC: Dividend = $0.50 per share.
Questions
1. Calculate the following.
a. Mean of Closing Prices - 𝑥
b. Standard Deviation of Closing Prices - s
2. Determine if any of the closing prices would be considered “volatile.”
a. 𝑥 − 2 𝑠
b. 𝑥 + 2 𝑠
c. List any months that have “volatile” closing prices.
3. Suppose you own 1000 shares in company ABC. What is the annual dollar amount you earn based on
the dividend?
4. Use Excel to plot the table of closing prices. Use the horizontal axis to represent the month and the
vertical axis to represent the closing price. Use the following link for a tutorial on graphing in Excel.
https://www.youtube.com/watch?v=3o11OlLgYDo
5. Based on the plot from (4), would you advise selling the stock now or holding off to wait for higher
closing prices? Provide a brief explanation for your answer
Answer by ewatrrr(24785) (Show Source): You can put this solution on YOUR website!
Closing Price:
$7.60 $7.80 $8 $9 $9.20 $9.40 $9.60 $10 $10.60 $11.80 $12.40 $14.20
1. mean = $9.97 and s = 1.994
2. mean ~10 and 2s ~ 4
10 ± 4 = (6, 14)
$14.20 month 12 > 2 sd from mean
4.

.
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