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Calculating returns, variances, standard deviations for X and Y

Using the following returns, calculate the average returns, the variances, and the standard deviations for X and Y.

See attached spreadsheet for the data.

Prob #7
RETURNS
Year X Y
1 10% 26%
2 18 -4
3 -8 -10
4 12 42
5 6 21

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Solution Preview

Please refer to attached.

RETURNS
Year X Y
1 10% 26%
2 18 -4
3 -8 -10
4 12 42
5 6 21

Step 1
Work out average return for each stock, from Year 1 to Year 5.

Average (RX) = (10 + 18 - 8 + 12 + 6) / 5
= 7.6%

Average ...

Solution Summary

The solution shows the formulas and the calculations to solve the questions in the problem.

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