You\'ve observed the following returns on Doyscher Corporation\'s stock over the

Question

You've observed the following returns on Doyscher Corporation's stock over the past five years: -25.8 percent, 14.2 percent, 31.4 percent, 2.6 percent, and 21.6 percent.

Requirement 1: What was the arithmetic average return on the stock over this five-year period? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Requirement 2:

(a) What was the variance of the returns over this period? (Do not round intermediate calculations. Round your answer to 6 decimal places (e.g., 32.161616).)

(b) What was the standard deviation of the returns over this period? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Explanation / Answer

All the calculations are made in the table below

Mean = 8.80%

Find the Standard deviation in an excel sheet as follows

S.D = =STDEV.S(B2:B6) = 22.02%

Variance = S.D2 = 22.02%2 = 4.85%

Year Return E-Avg( E) Square 1 -25.80% -34.60% 11.97% 2 14.20% 5.40% 0.29% 3 31.40% 22.60% 5.11% 4 2.60% -6.20% 0.38% 5 21.60% 12.80% 1.64% 8.80% 19.39%

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