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1. Over the past 3 years an investment returned 0.18, -0.11, and 0.08. What is the variance of returns?
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- Which one of the following is defined as the average compound return earned per year over a multiyear period? Multiple Choice A Geometric average return B Variance of returns C Standard deviation of returns D Arithmetic average return E. Normal distribution of returnsuppose the average return on Asset A is 7.1 percent and the standard deviation is 8.3 percent, and the average return and standard deviation on Asset B are 4.2 percent and 3.6 percent, respectively. Further assume that the returns are normally distributed. Use the NORMDIST function in Excel® to answer the following questions. a. What is the probability that in any given year, the return on Asset A will be greater than 12 percent? Less than 0 percent? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the probability that in any given year, the return on Asset B will be greater than 12 percent? Less than 0 percent? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. In a particular year, the return on Asset A was −4.38 percent. How likely is it that such a low return will recur at some point in the future? (Do not round…Calculate the standard deviation of the following returns. Year Return 1 0.25 2 0.16 3 0.01 4 0.07 5 -0.11
- Two investments generated the following annual returns (refer to image): a. What is the average annual return on each investment?b. What is the standard deviation of the return on investments X and Y?c. Based on the standard deviation, which investment was riskier?Use the following information to compute the standard deviation of returns: Yearly Returns Year Return (%) 1 19 2 1 3 10 4 26 5 4Suppose the average return on Asset A is 6.6 percent and the standard deviation is 8.6 percent and the average return and standard deviation on Asset B are 3.8 percent and 3.2 percent, respectively. Further assume that the returns are normally distributed. Use the NORMDIST function in Excel® to answer the following questions. a. What is the probability that in any given year, the return on Asset A will be greater than 11 percent? Less than 0 percent? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the probability that in any given year, the return on Asset B will be greater than 11 percent? Less than 0 percent? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. In a particular year, the return on Asset A was −4.25 percent. How likely is it that such a low return will recur at some point in the future? (Do…
- The standard deviation of return on investment a is 0.10, while the standard deviation of return on investment b is 0.04. If the correlation coefficient between the returns on A and B is_____________. A. -0.0447 B. -0.0020 C. 0.0020 D. 0.0447Which one of the following best describes an arithmetic average return? Multiple Choice A. Total return divided by N − 1, where N equals the number of individual returns B. Average compound return earned per year over a multiyear period C. Total compound return divided by the number of individual returns D. Return earned in an average year over a multiyear period E. Positive square root of the average compound returnWhat are the (a) expected return, (b) standard deviation, and (c) coefficient of variation for an investment with the following probability distribution? Probability Payoff 0.2 19.0% 0.7 9.0 0.1 4.0
- Question 10 Over the past 3 years an investment returned 0.15, -0.1, and 0.05. What is the variance of returns?1. Calculate the Expected Return and Risk measured in terms of standard deviation and Variance relating to the following information of a Investment avenue: Return in Percentage: -15-10-5+5+10+15 Probability:.10.15.20.20.25.10Use the following information to compute the standard deviation of returns: Yearly Returns Year Return (%) 1 19 2 1 3 10 4 26 5 4 a. 12% b. 10.42% c. 0.87% d. 108.5%