You’ve observed the following returns on Mary Ann Data Corporation’s stock over

Question

You’ve observed the following returns on Mary Ann Data Corporation’s stock over the past five years: 11 percent, –10 percent, 19 percent, 18 percent, and 10 percent.

What was the arithmetic average return on Mary Ann’s stock over this five-year period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

What was the variance of Mary Ann’s returns over this period? (Do not round intermediate calculations and round your answer to 5 decimal places. (e.g., 32.16161))

What was the standard deviation of Mary Ann’s returns over this period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

What was the arithmetic average return on Mary Ann’s stock over this five-year period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Year Return Variance (Variance)^2 1 11.00% 1.40% 0.01960% 2 -10.00% -19.60% 3.84160% 3 19.00% 9.40% 0.88360% 4 18.00% 8.40% 0.70560% 5 10.00% 0.40% 0.00160% Total 48.00% 0.00% 5.45% Question a. Average = 48/5 = 9.6% Question b1 Answer: zero. Question b2 Standard Deviation = square root(5.45%/5)=10.44%

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