Question

Here are the total returns for the S&P500 for the first ten years of this century. Assume you invested $1 in the S&P500 on January 1, 2001. Your first year's return was -11.85%.

Year	Return
2001	-11.85%
2002	-21.97%
2003	28.36%
2004	10.74%
2005	4.83%
2006	15.61%
2007	5.48%
2008	-36.55%
2009	26.94%
2010	18.00%

4 points. Q1. If you invested $1 at the beginning of the time frame [1/1/2001], how much would it be worth five years later? Show work and calculations.

4 points. Q2. If you invested $1 at the beginning of the time frame [1/1/2001], how much would it be worth ten years later? Show work and calculations.

4 points. Q3. What was the arithmetic return for the 10-year period?

4 points. Q4. What was the standard deviation of returns for the 10-year period?

2 points. Q5. What was the variance of returns for the 10-year period.

2 points. Q6. If you assumed returns were "normally distributed", what range of returns would you expect for a given year?

Answer 1