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Please DON'T use Excel! I need answers solved by Hand! thanks Consider the following historical returns on two investments A and B. The average risk-free
Please DON'T use Excel! I need answers solved by Hand! thanks
Consider the following historical returns on two investments A and B. The average risk-free rate during the 2016-2020 period was equal to 2%. Annual return Year 2020 2019 2018 2017 2016 Investment A 12% 8%. 10% 25% -12% Investment B 4% 6% 4% 8% -2% a) Calculate the arithmetic average return and the risk premium for each investment. Which investment is likely to be is riskier? Explain. (10 marks) b) Calculate the geometric average return for each investment. (4 marks) c) Calculate the standard deviation for each investment using the arithmetic average return. (6 marks)Step by Step Solution
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