Question

In: Statistics and Probability

The table below gives the annual total returns on Global Balanced Index Fund from 1999 to...

  1. The table below gives the annual total returns on Global Balanced Index Fund from 1999 to 2008. The returns are in the local currency. Use the information in this table to answer the following questions:

Table 1: Global Balanced Index Fund Total Returns, 1999-2008

Year

Return

1999

50.21%

2000

-2.18%

2001

12.04%

2002

26.87%

2003

49.90%

2004

24.32%

2005

45.20%

2006

-5.53%

2007

-13.75%

2008

-39.06%

a. Calculate the mean absolute deviation (MAD).

Calculation of MAD for Germany Index Total Returns, 1999-2008

Year

Return

1999

50.21%

2000

-2.18%

2001

12.04%

2002

26.87%

2003

49.90%

2004

24.32%

2005

45.20%

2006

-5.53%

2007

-13.75%

2008

-39.06%

  1. Calculate the variance.

Calculation of Variance for Germany Index Total Returns, 1999-2008

Year

Return

1999

50.21%

2000

-2.18%

2001

12.04%

2002

26.87%

2003

49.90%

2004

24.32%

2005

45.20%

2006

-5.53%

2007

-13.75%

2008

-39.06%

                       

           

                                                                                   

  1. Calculate the standard deviation.

           

d. Calculate the semi variance (the average squared deviation below the mean), a measure of downward risk.

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