Two investments generated the following annual returns (refer to image): a. What is the average annual return on each investment? b. What is the standard deviation of the return on investments X and Y? c. Based on the standard deviation, which investment was riskier?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Two investments generated the following annual returns (refer to image):

a. What is the average annual return on each investment?
b. What is the standard deviation of the return on investments X and Y?
c. Based on the standard deviation, which investment was riskier?

Investment X
Investment Y
19X0
10%
16%
19X1
20
18
19X2
30
15
19X3
20
20
19X4
10
21
Transcribed Image Text:Investment X Investment Y 19X0 10% 16% 19X1 20 18 19X2 30 15 19X3 20 20 19X4 10 21
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