As a finance major student of the UWI OC, you have just landed a lucrative job as a Financial

Planner with First Citizens Investment Services (FCIS), a major financial services company in your

home country. Your first assignment is to help one of its major clients Solar Inc., invest in a high

end stock. Solar Inc.’s CEO is impressed with Samsung’s performance over the years and have

asked you to explore the possibility of including a Samsung stock in its current stock portfolio.

You have come up with the following historical information for Samsung.

Beginning

Price Ending Price

Dividend

paid per

year

2011 $68.20 $72.45 $45.00

2012 72.45 85.50 50.00

2013 85.50 98.74 58.00

2014 98.74 122.60 65.00

2015 122.60 136.85 70.00

ABased on the above information, you are to examine the annual rate of return, the average

return for the five year period (assuming that the probability of returns are equal for each

year), the standard deviation of returns for the past five years and the coefficient of

variations of returns. Based on your calculations, what advice can you give to Solar Inc. if

the CEO has indicated that the company will only want to invest in a stock with a

coefficient of variation of returns below 0.75.