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Problem 5 Intro The following table shows historical end-of- year prices for two non-dividend-paying stocks. ТА ТВ с 1 Year S

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Answer #1

1. Arithmetic mean= (14.3+ 16.16 + 13.9 + 13.06 + 14.63 + 15.8)/6 = 14.6417

2. Variance = [(14.3)^2 + (16.16)^2 + (13.9)^2 + (13.06)^2 + (14.63)^2 + (15.8)^2]/6 - (arithmetic mean)^2

=( 204.49 + 261.1456 + 193.21 + 170.5636 + 214.0369 + 249.64)/6 - 214.3794 =1.13495

Standard deviation = 1.0653 ( square root of variance).

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