Question

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	%

Answer 1

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%