Question

The table below shows annual returns for stocks of companies X and Y. Calculate the arithmetic average returns. In addition, calculate their variances, as well as their standard deviations.

  

	Returns
Year	X	Y
1	15 %	18 %
2	33	39
3	22	-11
4	-23	-25
5	24	47

   

Requirement 1:
(a)	The arithmetic average return of company X's stock is:
	(Click to select)   14.20%   16.05%   11.50%   17.75%   17.32%

   

(b)	The arithmetic average return of company Y's stock is:
	(Click to select)   15.37%   17.00%   16.59%   11.02%   13.60%

  

Requirement 2:
(a)	The variance of company X's stock returns is: (Do not round intermediate calculations.)
	(Click to select)   0.059213   0.047370   0.047427   0.038370   0.059283

   

(b)	The variance of company Y's stock returns is: (Do not round intermediate calculations.)
	(Click to select)   0.086246   0.121100   0.078473   0.107808   0.096880

  

Requirement 3:
(a)	The standard deviation of company X's stock returns is: (Do not round intermediate calculations.)
	(Click to select)   24.35%   27.21%   21.76%   21.68%   17.63%

   

(b)	The standard deviation of company Y's stock returns is: (Do not round intermediate calculations.)
	(Click to select)   32.83%   25.21%   29.37%   38.91%   31.13%

rev: 09_20_2012

Answer 1