You\'ve observed the following returns on Crash-n-Burn Computer\'s stock over th

Question

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. a. What was the arithmetic average return on Crash-n-Burn's stock over this five-year period? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place, Average return b-1 What was the variance of Crash-n-Burn's returns over this period? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) Variance b-2 What was the standard deviation of Crash-n-Burn's returns over this period? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Standard deviation

Explanation / Answer

Year

Return

Return- Avg

(Return-Avg)2

1

11

0.8

0.64

2

-11

-21.2

449.44

3

18

7.8

60.84

4

23

12.8

163.84

5

10

-0.2

0.04

Avg

10.2

674.8

Variance = {Sum (Return – Average Return)Power2}/ No. of years

                 = 674.8/5

                 = 134.96

                                   = Square route of 134.96

                                   = 11.62

Year

Return

Return- Avg

(Return-Avg)2

1

11

0.8

0.64

2

-11

-21.2

449.44

3

18

7.8

60.84

4

23

12.8

163.84

5

10

-0.2

0.04

Avg

10.2

674.8

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