You’ve observed the following returns on Barnett Corporation’s stock over the pa

Question

You’ve observed the following returns on Barnett Corporation’s stock over the past five years: –27.3 percent, 15.2 percent, 33.4 percent, 3.1 percent, and 22.1 percent.

What was the arithmetic average return on the stock over this five-year period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  
Arithmetic average return             %

What was the variance of the returns over this period? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.)
  
Variance            
  
What was the standard deviation of the returns over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  
Standard deviation             %

Explanation / Answer

Arithmetic average return=Total return/Total time period

=(-27.3+15.2+33.4+3.1+22.1)/5

=9.3%

Standard deviation=[Total (Return-Mean)^2/(Time Period-1)]^(1/2)

=23.22%(Approx)

Variance=SD^2

=0.053937(Approx).

Return (Return-Mean)^2 -27.3 (-27.3-9.3)^2=1339.56 15.2 (15.2-9.3)^2=34.81 33.4 (33.4-9.3)^2=580.81 3.1 (3.1-9.3)^2=38.44 22.1 (22.1-9.3)^2=163.84 Total=2157.46%

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