You’ve observed the following returns on Barnett Corporation’s stock over the pa
ID: 2823916 • Letter: Y
Question
You’ve observed the following returns on Barnett Corporation’s stock over the past five years: –26.7 percent, 14.8 percent, 32.6 percent, 2.9 percent, and 21.9 percent.
What was the arithmetic average return on the stock over this five-year period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Arithmetic average return %
What was the variance of the returns over this period? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.)
Variance
What was the standard deviation of the returns over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Standard deviation
Explanation / Answer
Arithmetic average return =Total returns/Total time period
=(-26.7+14.8+32.6+2.9+21.9)/5=9.10%
Standard deviation=[Total (Return-Mean)^2/(Time period-1)]^(1/2)
=[2068.66/(5-1)]^(1/2)
=(2068.66/4)^(1/2)
22.74%(Approx).
Variance=Standard deviation^2
=0.051717(Approx).
Return (Return-Mean)^2 -26.7 (-26.7-9.1)^2=1281.64 14.8 (14.8-9.1)^2=32.49 32.6 (32.6-9.1)^2=552.25 2.9 (2.9-9.1)^2=38.44 21.9 (21.9-9.1)^2=163.84 Total=2068.66%Related Questions
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