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File Edit View History Bookmarks People Window Help Do Homework-Haley Blake Secure https://www.mathxl.com/Student/PlayerHomework.aspx?homeworkld 495026467&questionld-2&flushed f FIN 462 Section 70 Fall 2018 Haley Blake ONHomework: Chapter 5 Homework Score: 0.67 of 1 pt 2 of 10 (5 complete) HW Sco Fi SP5.2 (similar to) Your portfolio had the values in the following table for the four years listed: EB a. Calculate your return for each year over the 4-year period. Then calculate the average return over the 4-year period Hom b. Calculate the portfolio standard deviation. The return for 2013 is 10.12 %. (Round to two decimal places.) The return for 2014 is 654 % (Round to two decimal places) The return for 2015 is 9.67% (Round to two decimal places.) The return for 2016 is 758 %. (Round to t o dermal places.) The average return is 8.48% (Round to two decimal places) The standard deviation is 17O%. (Round to two decimal places.) se Op. Question is complete. Tap on the red indicators to see incorrect answers. Simi All parts showing This course (FIN 462 Section 70 Fall 2018) is based on Copyright 2018 Pearson Education 20 88 PS F2

Explanation / Answer

Answer a.

2013:

Return for 2013 = (Ending Value - Beginning Value) / Beginning Value
Return for 2013 = ($55,228 - $49,843) / $49,843
Return for 2013 = 10.80%

2014:

Return for 2014 = (Ending Value - Beginning Value) / Beginning Value
Return for 2014 = ($57,630 - $55,228) / $55,228
Return for 2014 = 4.35%

2015:

Return for 2015 = (Ending Value - Beginning Value) / Beginning Value
Return for 2015 = ($65,051 - $57,630) / $57,630
Return for 2015 = 12.88%

2016:

Return for 2016 = (Ending Value - Beginning Value) / Beginning Value
Return for 2016 = ($69,421 - $65,051) / $65,051
Return for 2016 = 6.72%

Average Return = (0.1080 + 0.0435 + 0.1288 + 0.0672) / 4
Average Return = 0.0869 or 8.69%

Answer b.

Variance = [(0.1080 - 0.0869)^2 + (0.0435 - 0.0869)^2 + (0.1288 - 0.0869)^2 + (0.0672 - 0.0869)^2] / 3
Variance = 0.004472 / 3
Variance = 0.001491

Standard Deviation = (0.001491)^(1/2)
Standard Deviation = 0.0386 or 3.86%

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