Assignment
Scenario Analysis Guidelines
Knowledge of statistics is important foundational knowledge for analyzing data. Equally important is what you can do with that information. An overarching goal of this course is to consider how statistics informs decision making, or data-based decision making. Throughout this course, you will be asked to make decisions and then to consider the impact of those choices. Whether in stock trading, in car sales, or on the production floor, the decisions you make as a business professional should be directly influenced by the data available to you. Careful analysis is the key to data-based decision making.
Each module task below provides a scenario and a list of questions for you to answer using data-based decision making.
Specifically, the following critical elements must be addressed:
I. Main Elements
II. Integration and Application
III. Analysis
IV. Critical Thinking
Guidelines for Submission:Your analysis of the scenario must be submitted as a 1- to 2-page Microsoft Word document with double spacing and 12-point Times New Roman font.
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.
|
|
Return
|
Standard Deviation
|
|
Stock A
|
15 %
|
8.3%
|
|
Stock B
|
14%
|
2.1%
|
1. As a financial advisor, are there factors other than return and risk that should be considered in making this decision?
2. Based on these factors, what stock would you recommend to the client?
3. What reasons will you convey to your client to justify your decision in recommending this stock?
4. How will this recommendation impact the client?