Question
$5.00 Finance 100 - Financial Return & Risk Co
Q:
Finance 100 - Financial Return & Risk Concepts
I am having some difficulties trying to figure out the following proglems - I am nervous to go to class Monday and not understand how to do them (incase of quiz) - PLEASE HELP!!!
1) From the information below, compute the average annual return, the variance, standard deviation, and coefficient of variation for each asset.
a) 5%, 10%, 15%, 4%
b) -6%, 20%, 2%, -5%, 10%
c) 12%, 15%, 17%
d) 10%, -10%, 20%, -15%, 8%, -7%
- Based upon your answers to question 1, which asset appears riskiest based on standard deviation? Based on coefficient of variation?
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answer
- This tutorial was purchased 15 times and rated A+ by students like you.
- Posted on Mar 01, 2012 at 10:07:03PM
A:
Preview: ... an = 9.765 / 4.2 = 2.325
c)
annual average return = (12 + 15 + 17)/3 = 44/3 % = 14.67 %
mean = 44 /3= 14.67
variance = ((-2.67)^2 + (0.33)^2 + (2.33)^2 )/3 = 4.22
standard deviation = (4.22)^(1/2) =2.055
coefficient of variation = s.d./mean = 2.055 / 14.67 = 0.14
d)
...
The full tutorial is about 310 words long .
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Answer for your question
- This tutorial hasn't been purchased yet.
- Posted on Mar 01, 2012 at 11:19:52PM
A:
Preview: ... -----------------------------------------------
b> -6%, 20%, 2%, -5%, 10%
Total Inputs(N) =(-6%, 20%, 2%, -5%, 10%)
Total Inputs(N)=5
Mean(xm)= (x1+x2+x3...xN)/N
Mean(xm)/ annual average return = 21/5
Means(xm)/ annual average return = 4.2%
Standard Deviation =
sqrt(1/(N-1)*((x1-xm)^2+(x2-xm)^2+..+(xN-xm)^2))
=sqrt(1/(5-1)((-6-4.2)^2+(20-4.2)^2+(2-4.2)^2+(-5-4.2)^2+(10-4.2)^2))
=sqrt(1/4((-10.2)^2+(15.8)^2+(-2.2)^2+(-9.2)^2+(5.8)^2))
=sqrt(1/4((104.03999999999999)+(249.64000000000001)+(4.840000000000001)+(84.63999999999999)+(33.64))) ...
The full tutorial is about 97 words long plus attachments.
mathprobans.docx (14K)