Consider the annualized stock return over the decade from 20

Consider the annualized stock return over the decade from 2000 to 2010, July to July,

expressed as an annual interest rate in percentage points per year, for major pharmaceutical

companies. For these top firm in this industry group, there was definitely a variety of experiences.

You may view these firms as a sample, indicating the performance of largepharmaceutical firms

in general during of the stock return

Firm: Abbott (Annualized Stock Return: 4.54%), Amgen (-2.31%), Bristol-Myers  (-2.12%), Eli Lilly (-7.69%), Genzyme (4.15%)

Gilead Sciences (22.40%), J&J (4.93%), Merck (-2.86%), Mylan (6.89%), Pfizer (-7.42%)

c. Find the range. What are the units of measurement?

d. Briefly, summarize the interpretation of the range (from c) in terms of the differences among these firms

e. Find the coefficient of variation, What are the units of measurement?

Solution

c) Range=Highest value-Lowest value=22.40-(-7.69)=30.09

Range is in terms of the data, so the units of measurement is %.

d) The range is quite high indicating that there is a lot of variation in the stock of the differnt companies. This means that some companies stock is really high, compared to some which have very low stock return.

e) mean =2.0513

sd=8.828

mean=sum(x)/n

sd=sqrt(sum(x-mean)^2/n

n=10

cv=sd/mean*100=430.4565

Since we mulitply by 100, the unit of measuremnt is percentage.