Question

Problem 2: Calculating ex-post risk measures Listed below are the annual rates of return earned on Stock X and Stock Y over the past 6 years. Which stock was riskier and why? Year 2013 2014 2015 2016 2017 2018 Stock X Stock Y 16% 17% 20% 15% -10% 30% 25% 14% 20% 24% 23% -10% 百一:/5.66% q0%. 15% 6-ベ

Answer 1

Year	Stock X	Stock Y
2013	20%	16%
2014	15%	17%
2015	-10%	20%
2016	30%	24%
2017	25%	23%
2018	14%	-10%
Total	94%	90%
Average Return	15.67%	15.00%
(Total / 6)

Based on the above, Stock Y is riskier than Stock X.

The reason is that, the average return of Y is less than average return of X and both stock X and Y gives the returns in oscillating manner i.e there no upward trend or no downward trend.