Question

question 6 You have the following historical annual total returns on Terlingua Oil & Gas Exploration:...

question 6 You have the following historical annual total returns on Terlingua Oil & Gas Exploration:

Year Annual total return (%)
2001 3%
2002 -4%
2003 12%
2004 15%
2005 -2%
2006 3%
2007 17%
2008 0%
2009 -1%
2010 5%

Calculate the sample standard deviation of annual return.

Do not round at intermediate steps in your calculation. Express your answer in percent. Round to two decimal places. Do not type the % symbol.

Homework Answers

Answer #1

Average Return = Sum of returns / Number of periods

=(3%-4%+12%+15%-2%+3%+17%+0%-1%+5%) / 10

= 4.80%

standard deviation = [Sum of Deviation Squared / (Number of Periods -1)]^(1/2)

=[ 491.60/(10-1)]^(1/2)

= 54.62%^(1/2)

Answer = 7.39%

Note:

Probable Return Deviation ( Probable Return- Expected Return) Deviation Squared
3 -1.800 3.24
-4 -8.800 77.44
12 7.200 51.84
15 10.200 104.04
-2 -6.800 46.24
3 -1.800 3.24
17 12.200 148.84
0 -4.800 23.04
-1 -5.800 33.64
5 0.200 0.04
Deviation Squared Total 491.60
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