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3 November, 15:12

Referring to Exercise 43, the annual report of Dennis Industries also gave these returns on stockholder equity for the same five-year period (in percent) : 13.2, 5.0, 10.2, 17.5, and 12.9.

a. What is the arithmetic mean return?

b. What is the variance?

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Answers (1)
  1. 3 November, 18:47
    0
    a. 11.76

    b. 21.113

    Step-by-step explanation:

    x

    13.2

    5

    10.2

    17.5

    12.9

    a)

    arithmetic mean=sumx/n

    arithmetic mean = (13.2+5+10.2+17.5+12.9) / 5=58.8/5=11.76

    Thus, the arithmetic mean return is 11.76.

    b)

    Variance=sum (x-xbar) ^2/n-1

    x x-xbar (x-xbar) ^2

    13.2 13.2-11.76=1.44 2.0736

    5 5-11.76=-6.76 45.6976

    10.2 10.2-11.76=-1.56 2.4336

    17.5 17.5-11.76=5.74 32.9476

    12.9 12.9-11.76=1.14 1.2996

    sum (x-xbar) ^2=2.074+45.698+2.434+32.948+1.3=84.452

    Variance=84.452/4=21.113

    Thus, variance is 21.113.
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