Question

The average monthly return for Cola Co. is _____%?

The average monthly return for Gas Co. is _____%?

The volatility for Cola Co. is _____%?

The following spreadsheet contains monthly returns for Cola Co. and Gas Co. for 2013. Using Month Gas Co. January February March April May June July August September October November December Cola Co. - 2.10% 0.00% -2.00% 0.90% -3.10% - 8.40% - 11.90% - 1.60% 5.50% - 1.10% - 3.80% - 2.20% - 0.50% - 1.80% 2.80% 8.40% - 4.60% 8.20% 4.60% 3.00% 1.40% 2.90% 7.40%

Answer 1

Using financial calculator to calculate mean of the return :-

Calculating return and volatility (standard deviation) of both Cola Co. and Gas Co.

Step 1: Press 2nd and then DATA , to fill in the data

Inputs:

X01= -2.10% Y01= 2.80%

X02= 0% Y02= -0.50%

X03= -2% Y03= -1.80%

X04= 0.90% Y04= 2.80%

X05= -3.10% Y05= 8.40%

X06= -8.40% Y06= -4.60%

X07= -11.90% Y07= 8.20%

X08= -1.60% Y08= 4.60%

X09= 5.50% Y09= 3.00%

X10= -1.10% Y10= 1.40%

X11= -3.80% Y11= 2.90%

X12= -2.20% Y12= 7.40%

Step 2 : Press 2ND and then STAT

Step 3 : Scroll down to get mean and standard deviation of both Cola Co. And Gas Co.

a) Average monthly return of Cola Co. = -2.48%

b) Average monthly return of Gas Co. = 2.88%

c) volatility for Cola Co. = 4.37%