Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started