You’ve observed the following returns on Barnett Corporation’s stock over the pa

Question

You’ve observed the following returns on Barnett Corporation’s stock over the past five years: –26.4 percent, 14.6 percent, 32.2 percent, 2.8 percent, and 21.8 percent.

What was the arithmetic average return on the stock over this five-year period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  
Arithmetic average return             %

What was the variance of the returns over this period? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.)
  
Variance            
  
What was the standard deviation of the returns over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  
Standard deviation             %

Explanation / Answer

Arithmetic average return =[Total of returns/Total time period]

=(-26.4+14.6+32.2+2.8+21.8)/5=9%

SD=[Total of (Return-mean)^2/(Time period-1)]^(1/2)

=22.50%

Variance=SD^2

=0.050626

Return (Return-mean)62 -26.4 (-26.4-9)^2=1253.16 14.6 (14.6-9)^2=31.36 32.2 (32.2-9)^2=538.24 2.8 (2.8-9)^2=38.44 21.8 (21.8-9)^2=163.84 Total=2025.04%

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