Question

Use the following returns for X and Y. Returns Year mto X 21.9% -16.9 9.9 19.8 4.9 Y 26.7% - 3.9 28.7 – 14.8 32.7 a. Calculate the average returns for X and Y. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the variances for X and Y. (Do not round intermediate calculations and round your answers to 6 decimal places, e.g., 32.161616.) c. Calculate the standard deviations for X and Y. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) % a. Average return b. Variance Standard deviation

A.) Calculate the average returns for X and Y.

B.) Calculate the variances for X and Y

C.) Calculate the standard deviations for X and Y.

Answer 1

	YEAR	RETURN OF X	(X -Average Return of X)^2		RETURN OF Y	(Y -Average Return of Y)^2
	1	21.90	195.440400		26.70	164.352400
	2	-16.90	616.032400		-3.90	316.128400
	3	9.90	3.920400		28.70	219.632400
	4	19.80	141.134400		-14.80	822.542400
	5	4.90	9.120400		32.70	354.192400
	Total	39.60	965.648000		69.40	1876.848000
a)	Average Return =	Total Return / NO of years			Total Return / NO of years
		39.60 / 5			69.40 / 5
		7.92			13.88
b)	Variance =	sum of (X -Average Return of X)^2 / (no of years - 1)			sum of (Y -Average Return of Y)^2 / (no of years - 1)
		965.648 / ( 5 - 1)			1876.848 / ( 5 - 1)
		241.412			469.212
c)	Standard Deviation =	Square root of Variance			Square root of Variance
		Square root of 241.412			Square root of 469.212
		15.54			21.66