Question

Calculate the arithmetic average, geometric average, variance, and standard deviation of an investment with five year returns of 10%, 6%, 4%, 2% and -10

Answer 1

YEAR	RETURN	(X -Average Return of X)^2
1	10	57.760000
2	6	12.960000
3	4	2.560000
4	2	0.160000
5	-10	153.760000
Total	12	227.200000
Average Return =	Total Return / NO of years
	12 / 5
	2.40
Variance =	sum of (X -Average Return of X)^2 / no of years
	227.20 / 5
	45.4400
Standard Deviation =	Square root of Variance
	Square root of 45.44
	6.74