Chapter $12-$ Dropbox $2\mathrm{.}4$

Problem $2$: Calculating Returns and Variability

Two alternative investments present the following expected returns:

Returns

Year X Y

$115\%21\%$

$226\%36\%$

$37\%13\%$

$4-13\%-26\%$

$511\%15\%$

a$)$ Calculate the arithmetic average returns, the variances, and the standard deviations for both X and Y$.$ b$)$ Which of these would you consider a superior investment? Why?