Question

2014 2015 2016 2017 2018 Stock return 21.25% 14.45% 25.50% 35.70% 11.05% Given the preceding data, the average realized return on BLM’s stock is . The preceding data series represents of BLM’s historical returns. Based on this conclusion, the standard deviation of BLM’s historical returns is .

Answer 1

Answer: Average realized stock = 21.59%,

The preceding data series represents a sample

Standard deviation = 0.7522

Explanation:

Average realized stock = 21.25% + 14.45% + 25.50% + 35.70% + 11.05% = 1.07595/5 = 21.95%

Standard deviation =

21.25% - 21.95% = -7.14%                      (-7.14%)^2         =  0.509

25.50% - 21.95% = 3.91%                      (3.91%)^2          =  0.512

35.70% - 21.95% = 14.11%                      (14.11%)^2          =  1.990

11.05% - 21.95% = -10.54%                     (-10.54%)^2      =   1.110

                                                                                           _____

                                                                                  Sum = 3.761/5 = 0.7522