Answer:
To determine which share had the most volatile returns, one would calculate the standard deviation of the historical returns for both shares. The share with the higher standard deviation is considered more volatile. Exact calculations require using the provided annual returns data for each share.
Step-by-step explanation:
To determine which share had the most volatile returns over the seven-year period, we need to calculate the standard deviation of the returns for each share. The standard deviation is a measure of the amount of variation or dispersion of a set of values. A low standard deviation indicates that the values tend to be close to the mean (average) of the set, while a high standard deviation indicates that the values are spread out over a wider range.
Calculation for Share Will:
Calculation of the mean return and then use this mean to find the variance and the square root of variance, which gives us the standard deviation.
Calculation for Share Smith:
Follow the same steps to calculate the mean, variance, and standard deviation for Share Smith.
After calculating the standard deviation for both shares, the share with the higher standard deviation will be considered more volatile. The exact calculations are not provided but would involve using the returns data given for each year.