Please answer question B. 1. The following are returns for an investment for 8 consecutive years: 6.38%, -5.42%, 7.02%, 5.58%, -6.18%, 6.92%, 7.21%, 6.15%.YearReturnsProduct16.38%1.0638-5.42%0.94587.02%1.070245.58%1.0558-6.18%0.93826.92%1.069277.21%1.072186.15%1.06151.2978a. Compute for the Arithmetic ReturnsAR= (6.38+-5.42+7.02+5.58+-6.18+6.92+7.21+6.15)/8= 27.66/8= 3.4575% or 3.46%%3!b. Determine the Variance and Standard Deviations.LO

The given problem can be computed using VAR and STDEV formula in excel.

Answered: er question B.

Business

Finance

er question B.

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 21PROB

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Question

Please answer question B.

1. The following are returns for an investment for 8 consecutive years: 6.38%, -
5.42%, 7.02%, 5.58%, -6.18%, 6.92%, 7.21%, 6.15%.
Year
Returns
Product
1
6.38%
1.0638
-5.42%
0.9458
7.02%
1.0702
4
5.58%
1.0558
-6.18%
0.9382
6.92%
1.0692
7
7.21%
1.0721
8
6.15%
1.0615
1.2978
a. Compute for the Arithmetic Returns
AR= (6.38+-5.42+7.02+5.58+-6.18+6.92+7.21+6.15)/8
= 27.66/8
= 3.4575% or 3.46%
%3!
b. Determine the Variance and Standard Deviations.
LO

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