Question

11. Consider the following returns of a portfolio:

| Jan 2% | Feb 5% | Mar -6% | Apr 3% | May -2% | Jun 4% |

A. Calculate the arithmetic average monthly return (1 point)

B. Calculate the geometric average monthly return (1 point)

C. Calculate the monthly variance (2 points)

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

ONLY STATISTICAL FORMULA, NO EXCEL FORMULAS USED.

STATS - Microsoft Excel (Product Activation Failed) Add-Ins View - 2x Dr General Wrap Text Merge & Center - ;. $ -% , Number Σ AutoSum : A Fill Sort & 2 Clear Filter Editing Formatting as Table Styles Styles Find & Select Alignment Cells File Home Insert Page Layout Formulas Data Review % Cut Calibri -11AA = = = Ea Copy Paste Format Painter BI U D V A Clipboard Font JW313 Fox JQ R S T 295 296 297 298 299 U V W JX JY JZ KA KB KC MONTH STOCK A A-E(A) (A-E(A))^2 1.00 5 4.00 16 -6 -7.00 49 32.00 4 -2 -3.00 9 4 3.00 9 300 TOTAL RETURN = ARITHMETIC AVERAGE MONTHLY RETURN = Α 1.00 E(A) 88.00 (A-E(A))^2 301 302 303 304 305 306 307 308 309 310 GEOMETRIC AVERAGE MONTHLY RETURN = 0.93 [=((1+0.02)*(1+0.05)*(1-0.06)*(1+0.03)*(1-0.02)*(1+0.04))^(1/6) - 1] MONTHLY VARIANCE = 17.60 = ((A-E(A))^2/n-1) =(88/5) 311 312 313 314 315 H P EMV MEAN STDV assignment DEAR Sheet2 COV TIME SERIES corr REGRESSION range CAMERA TREND freg_MATRIX V FV DIVIDEND ferences INTERVAL, NORMAL 90 HYPOTHI 120% Rea 0 + ELEB * 0 ENG 20-11-2019