1. A company had returns of 5%, 10%, -15%, 20%, -12%, 22%, 8% in the last few years. Compute the arithmetic average return, geometric average return, variance, and standard deviation of returns.
2. Refer to Problem 1. If the average risk-free rate over the past five years is 2%, what is the risk premium on the stock? Note: use the arithmetic average return in your computation.
3. Show on excel