P12-7 Calculating Returns and Variability [LO1]

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

	Returns
Year	X	Y
1	12 %	23 %
2	30	44
3	19	-11
4	-20	-25
5	21	52

Calculate the arithmetic average return for X

12.40%

15.50%

15.13%

14.01%

10.04%

Calculate the arithmetic average return for Y.

16.60%

20.75%

20.25%

18.76%

13.45%

Calculate the variance for X.

0.036930

0.046014

0.036812

0.046163

0.029913

Calculate the variance for Y.

0.113430

0.129711

0.103769

0.141787

0.091878

Calculate the standard deviation for X.

19.22%

21.45%

19.09%

24.02%

15.57%

Calculate the standard deviation for Y.

33.68%

36.02%

32.21%

42.10%

27.28%