question archive Given the following average annual returns for a stock over a four-year period, calculate the mean and standard deviation for the overall period: Year 2000 2001 2002 2003 Realized rate of return 15% -5% 20% 12%
Given the following average annual returns for a stock over a four-year period, calculate the mean and standard deviation for the overall period: Year 2000 2001 2002 2003 Realized rate of return 15% -5% 20% 12%
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Given the following average annual returns for a stock over a four-year period, calculate the mean and standard deviation for the overall period:
Year 2000 2001 2002 2003
Realized rate of return 15% -5% 20% 12%
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Answer:
| YEAR | Return (X ) | (X -Average Return of X)^2 |
| 2000 | 15 | 20.25 |
| 2001 | -5 | 240.25 |
| 2002 | 20 | 90.25 |
| 2003 | 12 | 2.25 |
| Total | 42 | 353.00 |
| Mean = | Total Return / NO of years | |
| 42 / 4 | ||
| 10.50 | ||
| Standard Deviation = | Square root of [((X -Average Return of X)^2) / (n -1)] | |
| Square root of (353.00/3) | ||
| 10.85 | ||
