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Risk and Return Estee Lauder and Lowe's

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Consider the following annual returns of Estee Lauder and Lowe's Companies:
Compute each stock's average return, standard deviation, and coefficient of variation. 

Estee Lowe's
Year Lauder Companies
2006 20.4% -6.0%
2005 -26.0% 16.1%
2004 17.6% 14.2%
2003 49.9% 48.0%
2002 -16.8% -19.0%

Average Return
Standard Deviation
Coefficient of Variation

Which company had a higher average return?
Which company had a lower risk?
Which company is a better risk-adjusted profile?

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Solution Summary

The solution is in an excel sheet showing step by step calculations of Average, Standard Deviation as well as the Coefficient of Variation.

Solution provided by:
Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
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