Question

P12-9 Calculating Returns and Variability (LO1) You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 5 percent. -9 percent, 25 percent, 17 percent, and 12 percent. Requirement 1: What was the average return on Crash-n-Burn's stock over this five year period? (Click to select) Requirement 2: (a)What was the variance of Crash-n-Burn's returns over this period? (Do not round intermediate calculations.) (Click to select) (b)What was the standard deviation of Crash-n-Burn's returns over this period? (Do not round intermediate calculations.) (Click to select)

Answer 1

. : X fix =B70-$B$76 B Year 1 21 3 C Deviation from mean (0.05) (0.19) 0.15 0.07 0.02 D Square of deviation 0.0025 0.0361 0.0225 0.0049 0.0004 0.0664 72 73 Returns 5% -9% 25% 17% 12% 50% 10.00% (50%/5) 0.0166 12.88% 74 75 Sum 76 Average return 77 78 Variance 79 Standard deviation 80 (root of variance) (0.0664/(5-1)

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