You find a certain stock that had returns of 13.4 percent, –21.7 percent, 27.7 p

Question

You find a certain stock that had returns of 13.4 percent, –21.7 percent, 27.7 percent, and 18.7 percent for four of the last five years. Assume the average return of the stock over this period was 11.40 percent.

What was the stock’s return for the missing year? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

What is the standard deviation of the stock’s returns? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

You find a certain stock that had returns of 13.4 percent, –21.7 percent, 27.7 percent, and 18.7 percent for four of the last five years. Assume the average return of the stock over this period was 11.40 percent.

Explanation / Answer

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2)

Average return 11.4 Years 5 Total returns in 5 years         57.00 Actual returns in 4 years: Years Return Total 1 13.4 2 -21.7 3 27.7 4 18.7 38.1 Return for missing year 18.9 Thus, Missing year's return is 18.9%

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