Returns for the Dayton Company over the last 3 years are shown below. What was t

Question

Returns for the Dayton Company over the last 3 years are shown below. What was the realized rate of return and the standard deviation of the firm's returns over the last three years<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

                                                      Year                 Return

                                                      2012                21.00%

                                                      2011               -12.50%

                                                      2010                25.00%

Explanation / Answer

mean = (21 - 12.5 + 25)/3 = 11.16

standard mean deviation = sqrt {(( 21-11.16)^2 + (-12.5-11.16)^2 +( 25-11.16)^2 ) / 3 } = 16.73 %

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