An investor recorded the following annual returns of one of his investments. You are required to calculate and comment on; Mean return. Variance and standard deviation of the return. Geometric return. Year 2016 2017 2018 2019 2020 Return 15% 17% 19% 10% -5%
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
- An investor recorded the following annual returns of one of his investments. You are required to calculate and comment on;
- Mean return.
- Variance and standard deviation of the return.
- Geometric return.
|
Year |
2016 |
2017 |
2018 |
2019 |
2020 |
|
Return |
15% |
17% |
19% |
10% |
-5% |
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