Consider the Following Annual Returns of Estee Lauder and Lowe's

question 59

Multiple Choice

Consider the following annual returns of Estee Lauder and Lowe's Companies:
$$\begin{array} { r r r } & { \text { Estee } } & \text { Lowe's } \\&\text { Lauder } & \text { Companies } \\2006&20.4 \% & - 6.0 \% \\2005&- 26.0 \% & 16.1 \% \\2004&17.6 \% & 14.2 \% \\2003&49.9 \% & 48.0 \% \\2002&- 16 . \% / 4 & - 19.0 \%\end{array}$$
Compute each stock's average return, standard deviation, and coefficient of variation.

• A) Estee Lauder: 9.02 percent, 17.99 percent, 2.00; and Lowe's Companies: 10.66 percent, 18.99 percent, 1.78
• B) Estee Lauder: 9.02 percent, 30.69 percent, 3.4; and Lowe's Companies: 10.66 percent, 18.99 percent, 1.78
• C) Estee Lauder: 9.02 percent, 30.69 percent, 3.4; and Lowe's Companies: 10.66 percent, 25.46 percent, 2.39
• D) Estee Lauder: 10.7 percent, 17.79 percent, 1.66; and Lowe's Companies: 12.64 percent, 18.99 percent, 1.50

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Definitions:

Holt's Model

A forecasting technique that extends exponential smoothing to capture both trend and seasonality in historical data for future prediction.

Level Component

A part or element that does not change or vary within a certain framework or system, maintaining a consistent state or position.

Historical Demand

Past data on the quantity of a product or service that consumers bought over a specific time period, used for forecasting future demand.

Qualitative Forecasting Methods

Techniques that use expert judgment and subjective inputs to forecast outcomes, rather than relying solely on historical numerical data.