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You invested a portfolio of commons stocks six years ago. The stock had the following annual returns. Year 1 (10%) Year 2 12% Year 3

You invested a portfolio of commons stocks six years ago. The stock had the following annual returns.

Year 1 (10%)

Year 2 12%

Year 3 8%

Year 4 15%

Year 5 (6%)

Year 6 (5 %)

Given this information, compute the following. Show all your calculations.

a) Geometric average (nearest 1/100 of one percent without % symbol, e.g. 6.98)? Answer

b) Standard deviation (nearest 1/100 of one percent without % symbol, e.g. 6.98)? Answer

c) If you had invested $33,500 in the stock portfolio six years ago, how much is that stock worth today (nearest dollar without $ symbol or commas, e.g. 5814)? Answer

d) As an investor, you are concerned over the variability of stock returns. Based on past returns and if the frequency distribution of returns follows a normal distribution, ninety five percent (95%) of the time, youd expect the returns of your portfolio to fall within what range in any given year (nearest 1/100 of one percent without % symbol, e.g. 6.98)?

Lower limit Answer

Upper limit Answer

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