You’ve observed the following returns on Doyscher Corporation’s stock over the p
ID: 2750248 • Letter: Y
Question
You’ve observed the following returns on Doyscher Corporation’s stock over the past five years: –28.2 percent, 15.8 percent, 34.6 percent, 3.4 percent, and 22.4 percent.
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).)
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).)
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).)
You’ve observed the following returns on Doyscher Corporation’s stock over the past five years: –28.2 percent, 15.8 percent, 34.6 percent, 3.4 percent, and 22.4 percent.
Explanation / Answer
(NOTE 1) :- Its appearing in the question that Negative sign (-) is given before 28.2 i.e. - 28.2 . So this figure is taken as negative return as per appearance of this numeric figure accompanied with this sign "-".
Requirement 1 :- The arithmetic average return on the stock over this five-year period
= (-) 28.2 + 15.8 + 34.6 + 3.4 + 22.4 / 5
= 9.6
Requirement 2: (a) The variance of the returns over this period
= 2294.56 / 5
= 458.912
= 458.92 (approx)
Requirement 2: (b) The Standard Deviation of the returns over this period
= Under root of Variance
= 21.42 % (approx) [ Using Calculator]
Years Returns (R) R - 9.6 (R - 9.6)2 1 (-) 28.2(NOTE 1) 37.8 1428.84 2 15.8 6.2 38.44 3 34.6 25 625 4 3.4 (-) 6.2 38.44 5 22.4 12.8 163.84 Total 48 2294.56Related Questions
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