Question: Geometric Returns, Unit Values, Arithmetic Returns, and Standard Deviations The following 8 questions refer to the following returns for stocks for the first ten years
Geometric Returns, Unit Values, Arithmetic Returns, and Standard Deviations
The following 8 questions refer to the following returns for stocks for the first ten years of the century. These are the total rate of returns; that is, both income and price. For example, the total rate of return for 2001 was a negative 11.85%.
If you invested $1.00 at the beginning of the time frame [1/1/2001],]
What was the Standard Deviation of Returns for the ten [10] years ending 12/31/2010?
Assume that stock returns are normally distributed. Use the 10-year standard deviation that you just calculated. Approximately, what range of returns would you expect 68% of the time for any given year?
| Total | |
| Year | Return |
| 2001 | -11.85% |
| 2002 | 3.97% |
| 2003 | 28.36% |
| 2004 | 10.74% |
| 2005 | 6.83% |
| 2006 | 15.61% |
| 2007 | 8.48% |
| 2008 | -36.55% |
| 2009 | 23.94% |
| 2010 | 21.00% |
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
Study Help