T12.22 Solution to Problem 12.7 (concluded)

Mean return on X = (.14 + .03 - .06 + .11 + .09)/5 = _____.

Mean return on Y = (.22 - .05 - .15 + .28 + .17)/5 = _____.

Variance of X = [(.14-.062)2 + (.03-.062)2 - (0.06-.062)2 + (.11-.062)2 + (.09-.062)2]/(5 - 1) = .0025.

Variance of Y = [(.22-.094)2 + (-.05-.094)2 - (-.15-.094)2 + (.28-.094)2 + (.17-.094)2]/(5 - 1) = .03413.

Standard deviation of X = (_______)1/2 = _______%.

Standard deviation of Y = (.03413)1/2 = 18.47%.

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