question archive The last four years of returns for a stock are as shown? here: Year 1 2 3 4 Return -3
The last four years of returns for a stock are as shown? here: Year 1 2 3 4 Return -3
Subject:FinancePrice:5.84 Bought3
The last four years of returns for a stock are as shown? here:
Year 1 2 3 4
Return -3.8% 27.6% 12.4% 4.5%
.
a. What is the average annual? return?
b. What is the variance of the? stock's returns?
c. What is the standard deviation of the? stock's returns?
Note?: Notice that the average return and standard deviation must be entered in percentage format. The variance must be entered in decimal format.
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
a.
10.175%
b.
0.01787
c.
13.37%
Step-by-step explanation
a.
Average annual return=(-3.8%+27.6%+12.4%+4.5%)/4
=40.7%/4=10.175%
b.
Variance
=[(-0.038-0.10175)2+(0.276-0.10175)2+(0.124-0.10175)2+(0.045-0.10175)2]/4-1
=(0.01953+0.03036+0.000495+0.00322)/3
=0.053605/3
=0.01787
c.
Standard deviation=(0.01787)1/2
=0.133678
=13.37%
