You have the following information on the return to three stocks over the past 4 years. USE THIS INFORMATION TO ANSWER QUESTIONS 8 THROUGH 17
Ford GE Amazon
2016 10  6 2
2017  5 13 6
2018 14  5 1
2019  7 18 7
First question: What are the sample mean returns for each of these stocks?
a. 
Sample mean of Ford = 16 Sample mean of GE = 20 Sample mean of Amazon = 16 

b. 
sample mean of Ford = 3 sample mean of GE = 5 sample mean of Amazon = 6 

c. 
Sample mean of Ford = 3 Sample mean of GE =5 Sample mean of Amazon = 4 

d. 
none of these 
What are the sample variances in returns of the three stocks?
a. 
Sample variance of Ford = 10.551 Sample variance of GE = 14.583 Sample variance of Amazon = 2.944 

b. 
sample variance of Ford = 111.333 sample variance of GE = 212.666 sample variance of Amazon = 89.666 

c. 
sample variance of Ford = 111.333 sample variance of GE = 151.333 sample variance of amazon = 8.666 

d. 
None of these 
ANSWER : 1. C & 2. C
1. Computation of sample mean.
YEAR  FORD  GE  AMAZON 
2016  10  6  2 
2017  5  13  6 
2018  14  5  1 
2019  7  18  7 
TOTAL  12  20  16 
Sample mean of Ford = 12/4 = 3
Sample mean of GE = 20/4 = 5
Sample mean of Amazon = 16/4 = 4
2. Computation of sample variance.
YEAR  FORD  GE  AMAZON 
2016  (10  3)2 = 49  (6  5)2 = 121  (2  4)2 = 4 
2017  (5  3)2 = 64  (13  5)2 = 64  (6  4)2 = 4 
2018  (14  3)2 = 121  (5  5)2 = 100  (1  4)2 = 9 
2019  (7  3)2 = 100  (18  5)2 = 169  (7  4)2 = 9 
TOTAL  334  454  26 
Sample variance of Ford = 334/3 = 111.333
Sample variance of GE = 454/3 = 151.333
Sample variance of amazon = 26/3 = 8.666
NOTE : Since it is sample variance therefore, the total has been divided by n1 i.e. 3.
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