Question

# Use the following returns for X and Y. Returns Year X Y 1 21.5 % 25.5...

Use the following returns for X and Y.

 Returns Year X Y 1 21.5 % 25.5 % 2 – 16.5 –3.5 3 9.5 27.5 4 19.0 –14.0 5 4.5 31.5

Calculate the average returns for X and Y. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

 Average returns X % Y %

Calculate the variances for X and Y. (Do not round intermediate calculations and round your answers to 6 decimal places, e.g., 32.161616.)

 Variances X Y

Calculate the standard deviations for X and Y. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

 Standard deviations X % Y %

1)Average return : [X1+X2+X3+X4+X5]/n

X : [21.5-16.5+9.5+19+4.5]/5

= 38/5= 7.6%

Y : [25.5-3.5+27.5-14+31.5]/5

= 67/5

= 13.4%

2)Variance = 1/n[(X1-ER)^2+(X2-ER)^2+....+(X5-ER)^2]

X: 1/5 [(21.5-7.6)^2+ (-16.5-7.6)^2+ (9.5-7.6)^2+(19-7.6)^2+(4.5-7.6)^2]

1/5 [ 193.21+ 580.81+ 3.61+ 129.96+ 9.61]

1/5 * 917.2

183.44

Y: 1/5 [(25.5-13.4)^2+(-3.5-13.4)^2+(27.5-13.4)^2+(-14-13.4)^2+ (31.5-13.4)^2]

1/5 [146.41+ 285.61+ 198.81+ 750.76+327.61]

1/5[1709.2]

341.84

3)Standard deviation =square root of variance

X : SR [183.44 ]

13.54%

Y : SR[341.84]

18.49%

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