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 | 7 % | 22 % |
2 | 25 | 43 |
3 | 14 | -9 |
4 | -15 | -23 |
5 | 16 | 51 |
Requirement 1: | |
(a) | The arithmetic average return of company X's stock is: |
(Click to select) 7.61% 10.62% 9.40% 11.75% 11.47% |
(b) |
The arithmetic average return of company Y's stock is: |
(Click to select) 20.50% 16.80% 13.61% 21.00% 18.98% |
Requirement 2: | |
(a) | The variance of company X's stock returns is: (Do not round intermediate calculations.) |
(Click to select) 0.018411 0.022730 0.022360 0.027950 0.028412 |
(b) | The variance of company Y's stock returns is: (Do not round intermediate calculations.) |
(Click to select) 0.129150 0.095996 0.083689 0.119995 0.103320 |
Requirement 3: | |
(a) |
The standard deviation of company X's stock returns is: (Do not round intermediate calculations.) |
(Click to select) 14.85% 18.85% 15.08% 12.21% 16.72% |
(b) |
The standard deviation of company Y's stock returns is: (Do not round intermediate calculations.) |
(Click to select) 30.98% 26.04% 34.64% 32.14% 40.18% |
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