A stock had returns of 18.58%, 1.34%, and 20.81% for the past three years. What is...

A stock had returns of 18.58%, 1.34%, and 20.81% for the past three years. What is the variance of returns? Answer with a decimal to the 4th place.

Please show work on paper, dont use excel

Solutions

Expert Solution

Mean = (0.1858 + 0.0134 + 0.2081) / 3

Mean = 0.13577 or 13.577%

Variance = [(0.1858 - 0.13577)^2 + (0.0134 - 0.13577)^2 + (0.2081 - 0.13577)^2] / 3 -1

Variance = [0.0025 + 0.01497 + 0.00523] / 2

Variance = 0.0114

jeff jeffy answered 2 years ago

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