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1. The last four years of returns for a stock are as follows: Year Return -4.5% 27.7% 12.2% 3.6% a. What is the average annual

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1. The last four years of returns for a stock are as follows: Year Return -4.5% 27.7% 12.2% 3.6% a. What is the average annual return? b. What is the variance of the stock's returns? c. What is the standard deviation of the stock's returns? 2.The last fou r years of returns for a stock are as follows: Year Return -4.0% 28.0% 12.0% 4.0% a. What is the average annual return? b. What is the variance of the stock's returns? c. What is the standard deviation of the stock's returns? 3. If returns of S&P 500 stocks are normally distributed, what range of returns would you expect to see 95% of the time? Base your answer on the information below Average Return Standard Deviation of returns Small Stocks 18.84% 38.38% S&P 500 11 .22% 20.29% Corporate Bonds 6.54% 6.82% T-Bills 3.67% 3.63% The 95% prediction interval of the S&P500 is between--% and--% ? Round to two decimal places and put the lower number first.) 4. If returns of S&P 500 stocks are normally distributed, what range of returns would you expect to see 95% of the time? Base your answer on the information below. Average Return Standard Deviation of returns Small Stocks 18.84% 38.38% S&P 500 11 22% 20.29% Corporate Bonds 6.54% 6.82% T-Bills 3.67% 3.63% The 95% prediction interval of the S&P500 is between %and--%? Round to two decimal places and put the lower number first.)

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