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Consider the following realized annual returns: Year Stock A 2000 23.6% 2001 24.7% 2002 30.5% 2003 9.0% 2004 -2.0% 2005 -17.3% 2006 -24.3% 2007 32.2%
Consider the following realized annual returns: Year Stock A 2000 23.6% 2001 24.7% 2002 30.5% 2003 9.0% 2004 -2.0% 2005 -17.3% 2006 -24.3% 2007 32.2% 2008 4.4% 2009 7.4% Index 50.3% 30.7% 86.9% 23.1% 0.2% -3.2% -27.0% 27.9% -5,1% - 11.3% a. Calculate the average of annual returns of the index. b. Compute the standard deviation of annual returns of the index. c. Compute the lower bound of the 95% confidence interval for annual returns of the index. Use the exact value from Excel, not an approximation d. Compute the geometric mean of annual returns of the index a. The average of annual returns of the index is 8.82 % (round to two decimals) b. The standard deviation of annual returns of the index is 19.45 % (round to two decimals) c. The lower bound of the 95% confidence interval of annual returns of the index is 3.2 % (round to one decimal) d. The geometric mean of annual returns of the index is 7.14 % (round to two decimals)
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