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QUESTION 2 Calculate the arithmetic average, standard deviation, and geometric average return for the following stock: Year 1 2 3 Retum 8% 996 5% -2%

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QUESTION 2 Calculate the arithmetic average, standard deviation, and geometric average return for the following stock: Year 1 2 3 Retum 8% 996 5% -2% 3% Equations Arithmetic average, R-(R1 + R2 +...+ RN)/N Geometric average = [(1+Rp) (1+R2)... (1+Rp)/(I/N) - 1 Variance = [(R1-R)2 + (R2-R)2 +...+(RN-R)?1/(N-1) Standard deviation (Variance)(1/2)

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