Using the following returms, calculate the arithmetic average returns, the varia

Question

Using the following returms, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y 12% 30 19 21 % 42 -14 -28 50 21 Requirement 1: (a) Calculate the arithmetic average return for X 12.40% B (b) Calculate the arithmetic average returm for Y 14.20%. B (a) Calculate the variance for X. (Do not round intermediate calculations.) 0029913- B (b) Calculate the variance for Y.(Do not round intermediate calculations.) 0.094705 (a) Calculate the standard deviation for X.(Do not round intermediate calculations.) (Cick to select (b) Caiculate the standard deviation for Y. (Do not round intermediate calculations.) Click to select MacBook Air 8 2 3

Explanation / Answer

Answer 1-a. Arthmetic Average Return for X = (0.12 + 0.30 + 0.19 - 0.20 + 0.21)/5 Arthmetic Average Return for X = 0.1240 or say 12.40% Answer 1-b. Arthmetic Average Return for y = (0.21 + 0.42 -0.14 -0.28 + 0.50)/5 Arthmetic Average Return for y = 0.1420 or say 14.20% Answer 2-a. Variance = {Sum all (Observation of Return - Mean Return)^2}/(n-1) Calculating for X: x (x - 12.40%)^2 1 0.12 0.000016 2 0.3 0.030976 3 0.19 0.004356 4 -0.2 0.104976 5 0.21 0.007396 0.62 0.14772 Variance for X = 0.14772 / 4 = 0.03693 Answer 2-b. Calculating for Y x (x - 14.20%)^2 1 0.21 0.004624 2 0.42 0.077284 3 -0.14 0.079524 4 -0.28 0.178084 5 -0.5 0.412164 -0.29 0.75168 Variance for Y = 0.75168 / 4 = 0.18792 Answer 3-a. Standard Deviation of X = Variance ^1/2 Standard Deviation of X = 003693 ^ 1/2 Standard Deviation of X = 0.192172 Answer 3-b. Standard Deviation of y = 0.18792 ^ 1/2 Standard Deviation of y = 0.433497

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