Question

Using the following returns, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y.

Returns

Year X Y

1 10 % 21 %

2 28 42

3 17 -9

4 -18 -23

5 19 50

Requirement 1: (a) Calculate the arithmetic average return for X

14%, 9.07%, 13.66%, 11.20%, 12.66%

b) Calculate the arithmetic average return for Y.

19.76%, 16.20%, 18.31%, 20.25%, 13.12%

Requirement 2: (a) Calculate the variance for X. (Do not round intermediate calculations.)

0.038181, 0.038462, 0.030545, 0.030770, 0.024924

(b) Calculate the variance for Y. (Do not round intermediate calculations.)

0.092460, 0.115575, 0.125088, 0.081057, 0.100070

Requirement 3: (a) Calculate the standard deviation for X. (Do not round intermediate calculations.)

19.54%, 17.38%, 21.93%, 14.21%, 17.54%

(b) Calculate the standard deviation for Y. (Do not round intermediate calculations.)

34%, 39.54%, 30.41%, 31.63%, 25.62%

Answer 1

YEAR Х 10% 28% 17% -18% 19% Y 21% 42% -9% -23% 50% REQUIREMENT 1 (a) 11.20% REQUIREMENT 1 (b) 16.20% REQUIREMENT 2 (a) 0.030770 REQUIREMENT 2 (b) 0.100070 REQUIREMENT 3 (a) 17.54% REQUIREMENT 3 (b) 31.63%

CALCULATIONS 3 YEAR X 4 2 5 6 7 8 9 0.1 0.28 0.17 -0.18 0.19 0.21 0.42 -0.09 -0.23 0.5 10 REQUIREMENT 1 (a) = AVERAGE(D4:08) 12 REQUIREMENT 1 (b) =AVERAGE(E4:E8) 13 14 15 REQUIREMENT 2 (a) =VAR.S(D4:D8) 17 REQUIREMENT 2 (b) =VAR.S(E4:E8) 18 19 20 REQUIREMENT 3 (a) =STDEV.S(D4:08) 22 REQUIREMENT 3 (b) =STDEV.S(E4:E8)