Rates of Return of Stocks Stocks may be categorized by

Chapter 2, Problem 21E

(choose chapter or problem)

Problem 21E

Rates of Return of Stocks Stocks may be categorized by industry. The following data represent the 5-year rates of return for a sample of consumer goods stocks and energy stocks ending October 20, 2010.

Consumer Goods
5.51	11.42	18.09	10.26	5.82
26.38	8.33	2.57	12.07	−0.37
4.73	24.6	−1.54	9.31	7.40
10.69	14.84	0.66	6.64	−14.74
10.84	15.18	8.08	11.34	21.43
1.53	7.00	1.63	−7.48	3.45
14.73	8.62	−0.60	−1.72	36.36

Energy
3.50	2.68	4.43	3.59	20.77
16.04	15.88	9.09	3.69	14.99
15.82	3.99	14.34	17.16	−4.51
29.97	5.95	−1.29	−9.04	11.77
11.68	6.82	12.22	10.69	16.67
8.92	2.76	14.76	2.39	−3.29
5.71	−2.55	6.06	7.39	3.90
Source: Morningstar

(a) Construct a frequency distribution for each industry. To make an easy comparison, create each frequency distribution so that the lower class limit of the first class is − 20 and the class width is 10.

(b) Construct a relative frequency distribution for each industry.

(c) On the same graph, construct a relative frequency polygon for the two industries.

(d) On the same graph, construct a relative frequency ogive for the two industries.

(e) Which industry appears to have the better performance for the 5-year period? Support your opinion.