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

Question

Using the following returns, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y Calculate the arithmetic average return for X. Calculate the arithmetic average return for Y. Calculate the variance for X. (Do not round intermediate calculations.) Calculate the variance for Y. (Do not round intermediate calculations.) (Click to select) Calculate the standard deviation for X. (Do not round intermediate calculations.) Calculate the standard deviation for Y (Do not round intermediate calculations.)

Explanation / Answer

CALCULATION FOR X

1./

ARITHIMATIC AVERAGE RETURN

= 1/5 (13% + 31% + 20% - 21% + 22%)

= 13%

2./

VARIANCE

= 1/5 (0% + 324% +49% + 1156% + 81%)

= 322%

3./

STANDARD DEVIATION

= SQUARE ROOT OF VARIANCE

= SQUARE ROOT 322%

=17.94%

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CALCULATION FOR Y

77.44%

1./

ARITHIMATIC AVERAGE RETURN

= 1/5 (26% + 47% -14% - 28% + 55%)

= 17.2%

2./

VARIANCE

= 1/5 (77.44% + 888.04% +973.44% + 2043.04% + 1428.84%)

= 1082.16%

3./

STANDARD DEVIATION

= SQUARE ROOT OF VARIANCE

= SQUARE ROOT 1082.16%

=32.89%

YEAR RETURN DEVIATION (D) D2 1 13% 0% 0% 2 31% 18% 324% 3 20% 7% 49% 4 -21% -34% 1156% 5 22% 9% 81%

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