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Consider the following realized annual returns: Year Stock A Index 2000 23.6% 50.3% 2001 24.7% 30.7%...

Consider the following realized annual returns:

Year

Stock A

Index

2000

23.6%

50.3%

2001

24.7%

30.7%

2002

30.5%

86.9%

2003

9.0%

23.1%

2004

-2.0%

0.2%

2005

-17.3%

-3.2%

2006

-24.3%

-27.0%

2007

32.2%

27.9%

2008

4.4%

-5.1%

2009

7.4%

-11.3%

a. Calculate the average of annual returns of the index.

b. Compute the standard deviation of annual returns of the index.

c. Compute the lower bound of the 95% confidence interval for annual returns of the index. Use the exact value from Excel, not an approximation.

d. Compute the geometric mean of annual returns of the index.

a. The average of annual returns of the index is %. (round to two decimals)

b. The standard deviation of annual returns of the index is %. (round to two decimals)

c. The lower bound of the 95% confidence interval of annual returns of the index is %. (round to one decimal)

d. The geometric mean of annual returns of the index is %. (round to two decimals)

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Answer #1

20 2003 2005. 2006 - 2007 2008 2009 a) 23.0% 33.03/10.109 1.2.47% 30. 7 13.45710.018 30.548692.69. 610.485 29.042343.8520.003

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