You just agreed to take a position of economic advisor for inosmart
Instructions
- Answer all questions.
- Show your approach.
- Organize your work suitably.
- The due date is Sunday at 11:59 PM EST.
Question 1
You just agreed to take a position of Economic Advisor for InoSmart Inc. The General Manager of the company asked you to describe the nature of salaries paid by the company to its employees last year. The Chief Accountant of the company delivers to you the aggregate monthly salaries data as follows:
Months
Aggregate Salaries
January
743430
February
705320
March
67950
April
780240
May
801970
June
69440
July
816550
August
734380
September
791110
October
753370
November
717640
December
805500
- Summarize the data and Provide statistical conclusion based on your statistical output. (Show your statistical procedures that led you to the conclusion.)
- Provide your results to the General Manager (in one or two sentences).
Question 2
As a financial advisor, you are assigned a new client who is considering investing in one of two stocks, A or B. The table below shows information about the performance of stocks A and B last year.
(Average) Return
Standard Deviation
Stock A
15%
8.3%
Stock B
15%
2.1%
- What factors would you consider as a financial advisor in making decisions about the data above?
- Based on these factors, what stock would you recommend to the client?
- What reasons will you convey to your client to justify your decision in recommending this stock?
- How will this recommendation impact the client?
