Question

Using the following returns, calculate the average returns, the variances, and the standard deviations for X and Y. (Note that the book covers both the "arithmetic" and the "geometric" averages. Here, calculate the regular "arithmetic" average returns. These are the average returns covered in the course lecture.

  

	Returns
Year	X	Y
1	13 %	23 %
2	31	44
3	20	-10
4	-21	-24
5	22	52

   

Requirement 1:
(a)	Calculate the average return for X.
	(Click to select)  15.86%  14.69%  16.25%  10.53%  13.00%

   

(b)	Calculate the average return for Y.
	(Click to select)  20.74%  19.21%  17.00%  13.77%  21.25%

  

Requirement 2:
(a)	Calculate the variance for X. (Do not round intermediate calculations.)
	(Click to select)  0.050313  0.032602  0.040188  0.050235  0.040250

   

(b)	Calculate the variance for Y. (Do not round intermediate calculations.)
	(Click to select)  0.137500  0.089100  0.101660  0.127075  0.110000

  

Requirement 3:
(a)	Calculate the standard deviation for X. (Do not round intermediate calculations.)
	(Click to select)  19.95%  22.41%  20.06%  25.08%  16.25%

   

(b)	Calculate the standard deviation for Y. (Do not round intermediate calculations.)
	(Click to select)  41.46%  33.17%  26.86%  35.65%  31.88%

Answer 1

EXCEL FORMULA: