Math Problem Statement
Consider the following five monthly returns: 3%, −1, 2%, 6%, −4% . Calculate the arithmetic average monthly return over this period and express your answer as a percentage per month.
b. Calculate the geometric average monthly return over this period.
c. Calculate the monthly variance over this period.
d. Calculate the monthly standard deviation over this period.
Solution
Ask a new question for Free
By Image
Drop file here or Click Here to upload
Math Problem Analysis
Mathematical Concepts
Arithmetic Mean
Geometric Mean
Variance
Standard Deviation
Financial Mathematics
Formulas
Arithmetic Average: Ra = (Σri) / n
Geometric Average: Rg = [(Π(1 + ri))^(1/n)] - 1
Variance: Variance = (Σ(ri - Ra)^2) / n
Standard Deviation: SD = √Variance
Theorems
Properties of Means
Concept of Variance and Standard Deviation
Suitable Grade Level
Undergraduate Finance/Statistics
Related Recommendation
Calculate Arithmetic and Geometric Returns, Variance, and Standard Deviation
Calculate Arithmetic and Geometric Average Returns for Stock with 4%, 9%, -5%, and 17% Returns
Calculate Average Return, Variance, and Standard Deviation of Investment Returns
Understanding Annual Returns, Variance, and Standard Deviation in Finance
Calculate Arithmetic and Geometric Returns for Stock Performance