Question

Use the following common stock price information for HEICO Corporation (Ticker: HEI) to answer questions 4 - 8. Assume that HEICO Corporation doesn't pay a dividend.

End of Year	Stock Price	Returns
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018	$8.29 $8.92 $13.71 $18.22 $18.58 $27.25 $31.07 $28.52 $39.40 $64.26 $84.50	-       7.60% 53.70% 32.90% 1.98% 46.66% 14.02% -8.21% 38.15% 63.10% 31.50%

The sum of squares equals 0.4979587.

how do I do this by hand?? I do not understand how the key got these numbers (bold numbers)

4. The average return is:
   1. 25.58%
   2. 28.14%
   3. $31.16
   4. $34.27
5. The standard deviation of returns is:
   1. 23.52%
   2. 2.23%
   3. 22.31%
   4. 0.055329%
6. The variance of returns is:
   1. 0.055329%
   2. 0.023522
   3. 0.055329
   4. 0.235221
7. If you purchased this stock at the end of 2009 and sold it at the end of 2014, your holding period return would be:

   -71.29% 39.99% 216.04% 248.32%

   $31.07 / $8.92 - 1 = 248.32%

8. If you purchased this stock at the end of 2011 and sold it at the end of 2017, your annualized return would be:

   1,923.66% -18.95% 23.38% 27.36%

   ($64.26 / $18.22)1/6 - 1 = 23.38%%

Answer 1

1) Average = Sum of all the Interest rate returns/Number of Years

= 281.14/10

= 28.14

2) Standard Deviation =

where is standard deviation, N is the number of years, X_i is Observations like X_1, X₂ etc and   is average we found in part 1,

= [(7.90 - 28.14)² + (53.70 - 28.14)²........................+ (31.50 - 28.14)²/10]^1/2

=23.52%

3) Variance = (Standard deviation)²

= (.2352)² [ not using the percent sign]

= .0055319

4) purchased the stock in 2009 for $8.92 and sold it for $31.07 at the end of 2014

made the profit of 31.07-8.92 =22.15

this profit is made on the expense of $8.92

so 22.15/8.92 = 2.48318 in terms of percent it get multiplied by 100 than it is equal to 248.32%