PART $1$: CALCULATION$-$BASED QUESTIONS

Risk and Return Analysis $(15$ Points Total$)$

You are considering investing in stock that had the following returns over the past four years:

Year $1$: $10\%,$ Year $2$: $-5\%,$ Year $3$: $12\%,$ Year $4$: $8\%$

a$)$ Calculate the average return over the four years. $(7$ points$)$

b$)$ Compute the standard deviation of the returns. $(8$ points$)$