Question

The table below displays returns associated with a company's shares over the last 15 years. Year...

The table below displays returns associated with a company's shares over the last 15 years.

Year Return
(% pa)
2005 9
2006 -2
2007 20
2008 -4
2009 18
Year Return
(% pa)
2010 8
2011 19
2012 1
2013 13
2014 -2
Year Return
(% pa)
2015 35
2016 -3
2017 28
2018 18
2019 31

Based on this historic data, calculate the expected return on the shares and its standard deviation. Give your answers as a percentage per annum to 2 decimal places.

a)Expected return =  % pa

b)Standard deviation =  % pa

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Answer #1

Answer:

a.) Expected Return: 12.60% pa

b.) Standard deviation: 12.94% pa

Calculation:

Please find the attached images for a detailed solution and formula.

Hope this will help you. If you need more clarification in any of the steps let me know in comment.

All the Best!

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