Question
Here are the total returns for the S&P500 for the first ten years of this century. Assume you invested $1 in the S&P500 on January
Here are the total returns for the S&P500 for the first ten years of this century. Assume you invested $1 in the S&P500 on January 1, 2001. Your first year's return was -11.85%.
Year | Return |
2001 | -11.85% |
2002 | -21.97% |
2003 | 28.36% |
2004 | 10.74% |
2005 | 4.83% |
2006 | 15.61% |
2007 | 5.48% |
2008 | -36.55% |
2009 | 26.94% |
2010 | 18.00% |
4 points. Q1. If you invested $1 at the beginning of the time frame [1/1/2001], how much would it be worth five years later? Show work and calculations.
4 points. Q2. If you invested $1 at the beginning of the time frame [1/1/2001], how much would it be worth ten years later? Show work and calculations.
4 points. Q3. What was the arithmetic return for the 10-year period?
4 points. Q4. What was the standard deviation of returns for the 10-year period?
2 points. Q5. What was the variance of returns for the 10-year period.
2 points. Q6. If you assumed returns were "normally distributed", what range of returns would you expect for a given year?
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