You\'ve observed the following returns on Crash-n-Burn Computer\'s stock over th

Question

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 12 percent, -9 percent, 20 percent, 17 percent, and 10 percent. a. What was the arithmetic average return on Crash-n-Burn's stock over this five-year period? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place, Average return 10 % b-1 What was the variance of Crash-n-Burn's returns over this period? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161) Variance b-2 What was the standard deviation of Crash-n-Burn's returns over this period? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g, 32.16.) Standard deviation

Explanation / Answer

Arithmetic return=total of returns/Total time period

=(12-9+20+17+10)/5=10%

SD=[Total of (Return-Mean)^2/(Time period-1)]^(1/2)

=11.34%(Approx)

Variance=SD^2

=0.01285

return (return-mean)^2 12 (12-10)^2=4 -9 (-9-10)^2=361 20 (20-10)^2=100 17 (17-10)^2=49 10 (10-10)^2=0 Total=514%

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