Question

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 12 percent, -12 percent, 19 percent, 24 percent, and 10 percent. points a. What was the arithmetic average return on the company's stock over this five-year period? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b-1. What was the variance of the company's returns over this period? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What was the standard deviation of the company's 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.) X Answer is complete but not entirely correct. a. % Average return Variance Standard deviation variance in b-1. 12.0 % 2.74000 16.55 X b-2. %

Answer 1

YEAR	RETURN	(X -Average Return of X)^2
1	12	1.960000
2	-12	510.760000
3	19	70.560000
4	24	179.560000
5	10	0.360000
Total	53	763.200000
Average Return =	Total Return / NO of years
	53 / 5
	10.6
Variance =	sum of (X -Average Return of X)^2 / no of years
	763.20 / 5
	152.64000
Standard Deviation =	Square root of Variance
	Square root of 152.64
	12.35