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Problem 8-05 Two investments generated the following annual returns: Investment X Investment Y 20X0 14 % 16 % 20X1 22 26 20X2 30 10 20X3

Problem 8-05

Two investments generated the following annual returns:

Investment X Investment Y
20X0 14 % 16 %
20X1 22 26
20X2 30 10
20X3 15 17
20X4 11 22

What is the average annual return on each investment? Round your answers to one decimal place.

The average annual rate of return on X: %

The average annual rate of return on Y: %

What is the standard deviation of the return on investments X and Y? Round your answers to two decimal places.

Standard deviation of X:

Standard deviation of Y:

Based on the standard deviation, which investment was riskier?

-Select-Investment XInvestment YItem 5 was riskier.

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