Question

Use the following returns for X and Y. Returns Year X Y 1 22.3 % 27.9 % 2 – 17.3 – 4.3 3 10.3 29.9 4 20.6 – 15.6 5 5.3 33.9 Requirement 1: Calculate the average returns for X and Y. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16)

Answer 1

The average return for stock X is 8.24% and the average return for stock Y is 14.16%.

Step-by-step explanation:

To calculate the average returns for stocks X and Y, we sum up the returns for each stock separately over the given years and then divide by the number of years. Here's the step-by-step calculation:

Add the returns for stock X:

22.3% + (-17.3%) + 10.3% + 20.6% + 5.3%

= 41.2%

Divide the sum by the number of years to find the average return for stock X:

41.2% / 5

= 8.24%

Add the returns for stock Y:

27.9% + (-4.3%) + 29.9% + (-15.6%) + 33.9%

= 70.8%

Divide the sum by the number of years to find the average return for stock Y:

70.8% / 5

= 14.16%

Therefore, the average return for stock X is 8.24% and the average return for stock Y is 14.16%.