Question

Returns

Year   X Y

1 11 % 23 %

2   15 26

3   10 11

4 –13 –14

5   10 16

Using the returns shown above, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. (Do not round intermediate calculations. Enter your average return and standard deviation as a percent rounded to 2 decimal places, e.g., 32.16, and round the variance to 5 decimal places, e.g., 32.16161.)

Answer 1

	Return (X )	Return (Y)		(X -Average Return of X)^2	(Y -Average Return of Y)^2
Year 1	11	23		19.36	112.36
Year 2	15	26		70.56	184.96
Year 3	10	11		11.56	1.96
Year 4	-13	-14		384.16	696.96
Year 5	10	16		11.56	12.96
Total	33	62		497.20	1009.20
Average Return =	Total Return / NO of years
	33 / 5	62 / 5
	6.60	12.40
Variance =	[((X -Average Return of X)^2) / n ]	[((Y -Average Return of Y)^2) / n ]
	497.2 / 5	1009.2 / 5
	99.44000	201.84000
Standard Deviation =	Square root of [((X -Average Return of X)^2) / n ]	Square root of [((Y -Average Return of Y)^2) / n ]
	Square root of (497.2/5)	Square root of (1009.2/5)
	9.97	14.21