AVERAGE RETURN –

(A) What is the average return for an asset that had annual returns over the past 10 years, respectively, of 10 percent, 2 percent, 8 percent, 4 percent, 6 percent, 2 percent, 10 percent, 8 percent, 6 percent and 4 percent? Calculate the variance and standard deviation of the returns? (PLEASE INCLUDE FORMULAS USED TO SOLVE PROBLEM FOR EXCEL).

RISK AND RETURN –

(B) Candy is buying only one investment asset and her choice is the asset in (QUESTION A), or an asset that paid an average return over the past ten years of 5.8 percent and had a standard deviation of 0 percent. What factors will affect Candy’s decision? (PLEASE INCLUDE FORMULAS USED TO SOLVE PROBLEM FOR EXCEL).