Homework Answers
9
Geo return = (((1+2014 return)*(1+2015 return)*(1+2016 return)*(1+2017 return))^(1/4)-1
=((1+0.11)*(1+0.15)*(1+0.08)*(1+0.12))^(1/4)-1 = 11.47%
10
| Year | Stock |
| 2014 | 11.00% |
| 2015 | 15.00% |
| 2016 | 8.00% |
| 2017 | 12.00% |
| Average= | 11.50% |
| Standard dev= | 2.89% |
| Where | |||
| Average or Mean = Sum of all observations/Count of all observations | |||
| Sample Standard deviation =((∑k=1 to N (observationk – average))/(N-1))^(1/2) | |||
| as per 95% rule | ||
| range = mean +/- 1.96*std dev | ||
| =11.5 +/- 1.96*2.89 | ||
| =11.5 - 1.96*2.89 to 11.5 + 1.96*2.89 | ||
| =5.84 to 17.16 |
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