You are given actual returns for stock Z for four years. So, you have four observations....

Transcribed Image Text:

You are given actual returns for stock Z for four years. So, you have four observations. You do NOT have the probability distribution!! You have a sample of four observations. Year Actual Return 1 0.03 2 0.15 3 4 0.25 0.09 Mean is the average return. (Historical) variance = (sum of squared deviations from the mean) / (number of observations - 1) Standard deviation-square root of the variance Mean is (do not round your answer, you will hve two digits after the decimal point) You cannot use z notation for this mean but Z. Squared deviation of 0.03 from the mean is Squared deviation of 0.15 from the mean is point) Squared deviation of 0.25 from the mean is (do not round your answer, you will have two digits after the decimal point). (Hint: substract mean from 0.03, then square this difference) (do not round your answer, you will have four digits after the decimal (do not round your answer, you will have four digits after the decimal point) (do not round your answer, you will have four digits after the decimal point) which is the numerator of the variance formula above. Squared deviation of 0.09 from the mean is Then, the sum of squared deviations from the mean is Number of observations is One less the number of observations is which is the denominator of the variance formula above. (Historical) variance is (do not round your answer, you will have four digits after the decimal point) You cannot use notation but s Standard deviation is (round to three decimal places meaning you should round to have three digits after the decimal point) You cannot use oz notation but Sz You are given actual returns for stock Z for four years. So, you have four observations. You do NOT have the probability distribution!! You have a sample of four observations. Year Actual Return 1 0.03 2 0.15 3 4 0.25 0.09 Mean is the average return. (Historical) variance = (sum of squared deviations from the mean) / (number of observations - 1) Standard deviation-square root of the variance Mean is (do not round your answer, you will hve two digits after the decimal point) You cannot use z notation for this mean but Z. Squared deviation of 0.03 from the mean is Squared deviation of 0.15 from the mean is point) Squared deviation of 0.25 from the mean is (do not round your answer, you will have two digits after the decimal point). (Hint: substract mean from 0.03, then square this difference) (do not round your answer, you will have four digits after the decimal (do not round your answer, you will have four digits after the decimal point) (do not round your answer, you will have four digits after the decimal point) which is the numerator of the variance formula above. Squared deviation of 0.09 from the mean is Then, the sum of squared deviations from the mean is Number of observations is One less the number of observations is which is the denominator of the variance formula above. (Historical) variance is (do not round your answer, you will have four digits after the decimal point) You cannot use notation but s Standard deviation is (round to three decimal places meaning you should round to have three digits after the decimal point) You cannot use oz notation but Sz