Answer (s):
- The stock's expected return: 3.8225%
- The stock's variance: 215.26%
- The stock's standard deviation: 14.67%
Step-by-step explanation:
The stock has the following annual returns:
-10.29%, 1.32%, 28.18%, and -3.92%.
what is the stock's: a) expected return?: 3.8225%
what is the stock's: b) variance?: 215.26%
what is the stock's: c) standard deviation?: 14.67%
- To calculate the expected return, we need to take the average of the annual returns:
- To calculate the variance, we need to find the average of the squared differences between each annual return and the expected return.
- To calculate the standard deviation, we need to take the square root of the variance.
Solve Problem:
- The stock's expected return is:
( -10.29 + 1.32 + 28.18 - 3.92) / 4 = 3.8225%
- To calculate the variance, we need to find the average of the squared differences between each annual return and the expected return.
(( -10.29 - 3.8225)^2 + (1.32 - 3.8225)^2 + (28.18 - 3)
- To calculate the standard deviation, we need to take the square root of the variance.
√215.26 = 14.67%
Answers:
- The stock's expected return: 3.8225%
- The stock's variance: 215.26%
- The stock's standard deviation: 14.67%
Hope this helps!