Over the past five years, a stock returned 8.4 percent, 8.7 percent, 3.2 percent, 1.5 percent,...

Over the past five years, a stock returned 8.4 percent, 8.7 percent, 3.2 percent, 1.5 percent, and 11.5 percent, respectively. What is the variance of these returns? A) .041302 B) .043375 C) .006824 D) .165321 E) .005459

Solutions

Expert Solution

Mean = (0.084 + 0.087 + 0.032 + 0.015 + 0.115) / 5

Mean = 0.0666 or 6.66%

Variance = [(0.084 - 0.0666)² + (0.087 - 0.0666)² + (0.032 - 0.0666)² + (0.015 - 0.0666)² + (0.115 - 0.0666)²] / 5 - 1

Variance = [0.000303 + 0.000416 + 0.001197 + 0.002663 + 0.002343] / 4

Variance = 0.001731

Note: options looks incorrect. If the question is slightly different, please put it comments.

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

. Over the past five years, a stock produced returns of 10 percent, 18 percent, 2...

. Over the past five years, a stock produced returns of 10 percent, 18 percent, 2 percent, -9 percent, and 4 percent. a) What is the geometric return? b) What is the arithmetic return? c) What is the variance of the above returns? d) What is the sample standard deviation?

What is the variance of returns if over the past three years an investment returned 8.0 percent, -12.0 percent, and 15.0 percent?

PLEASE SHOW WORK What is the variance of returns if over the past three years an investment returned 8.0 percent, -12.0 percent, and 15.0 percent? 112 196 265 131

You’ve observed the following returns on Bennington Corporation’s stock over the past five years: 17 percent,...

You’ve observed the following returns on Bennington Corporation’s stock over the past five years: 17 percent, −4 percent, 20 percent, 12 percent, and 10 percent. a. What was the arithmetic average return on the company's stock over this five-year period? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b-1. What was the variance of the company's stock returns over this period? (Do not round intermediate calculations and round your...

You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 17 percent,...

You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 17 percent, –15 percent, 19 percent, 29 percent, and 10 percent. a. What was the arithmetic average return on the company's stock over this five-year period? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) Average return % b-1 What was the variance of the company's stock returns over this period? (Do not round intermediate calculations...

A stock returned 23 percent, 18 percent, -4 percent and -1 percent annually for the past...

A stock returned 23 percent, 18 percent, -4 percent and -1 percent annually for the past four years. Based on this information, what is the 99.74 percent probability range for any one given year? A. -4.49 percent to 22.49 percent B. -22.36 percent to 39.36 percent C. -31.47 percent to 49.47 percent D. -17.98 percent to 35.98 percent Assume an asset cost $44,500 and has a current book value of $25,700. The asset is sold today for $21,900 cash. The...

Over the past four years, a stock produced returns of 14 percent, 22 percent, 6 percent,...

Over the past four years, a stock produced returns of 14 percent, 22 percent, 6 percent, and -19 percent. What is the approximate probability that an investor in this stock will not lose more than 30 percent nor earn more than 41 percent in any one given year? How would you calculate this in excel?

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 11 percent,...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 11 percent, –11 percent, 18 percent, 23 percent, and 10 percent. Suppose the average inflation rate over this period was 2 percent and the average T-bill rate over the period was 3.1 percent. a. What was the average real risk-free rate over this time period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 4 percent,...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 4 percent, -12 percent, 24 percent, 20 percent, and 15 percent. Requirement 1: What was the average return on Crash-n-Burn’s stock over this five year period? (Click to select) 10.20% 12.75% 12.14% 11.12% 8.26% Requirement 2: (a) What was the variance of Crash-n-Burn’s returns over this period? (Do not round intermediate calculations.) (Click to select) 0.01682 0.02102 0.02183 0.01913 0.01703 (b) What was the standard deviation of Crash-n-Burn’s returns over this period? (Do...

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 7 percent,...

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 7 percent, -15 percent, 19 percent, 37 percent, and 18 percent. Suppose the average inflation rate over this period was 3.81 percent and the average T-bill rate over the period was 4.62 percent. What was the average real risk premium over this time period? (Enter your answer as a percentage, omit the "%" sign in your response, and round your answer to 2 decimal places. For...

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 9 percent,...

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 9 percent, -15 percent, 21 percent, 33 percent, and 17 percent. Suppose the average inflation rate over this period was 3.63 percent and the average T-bill rate over the period was 4.13 percent. What was the average real risk premium over this time period? [Hint: Step 1: Calculate the average real rate of return for Crash-n-Burn Computer. Step 2: Calculate the average real rate of return...

Subjects