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

ID: 2713910 • Letter: U

Question

Using the following returns, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y.

A.)12.50%

B.)10.00%

C.)12.20%

D.)8.10%

E.)11.30%

    

A.)18.20%

B.)22.20%

C.)20.57%

D.)22.75%

E.)14.74%

  

A.)0.031158

B.)0.025250

C.)0.020453

D.)0.031562

E.)0.024927

    

A.)0.116920

B.)0.146150

C.)0.094705

D.)0.136490

E.)0.109192

  

Calculate the standard deviation for X. (Do not round intermediate calculations.)

A.)17.65%

B.)12.87%

C.)15.69%

D.)19.86%

E.)15.89%

    

Calculate the standard deviation for Y. (Do not round intermediate calculations.)

A.)33.04%

B.)27.70%

C.)34.19%

D.)42.74%

E.)36.94%

Requirement 1: (a) Calculate the arithmetic average return for X.

A.)12.50%

B.)10.00%

C.)12.20%

D.)8.10%

E.)11.30%

Y 25 46-14 54 Y56044 24-25 R% X86567 X 2111 e12345

Explanation / Answer

Enter these yearly returns in an excel sheet and calculate the required using the formulas as below

Stock X

1. Average return =AVERAGE(A1:A5) = 10.00%

2. Variance =VAR.S(A1:A5) = 0.025250

3. Standard Deviation = STDEV.S(A1:A5) = 15.89%

A1 to A5 has yearly returns for X

Stock Y

1. Average return =AVERAGE(B1:B5) = 18.20%

2. Variance =VAR.S(B1:B5) = 0.116920

3. Standard Deviation = STDEV.S(B1:B5) = 34.19%

B1 to B5 has yearly returns for Y