Please help me to better understand stock returns. Thanks for the help! Van Horn

Question

Please help me to better understand stock returns.

Thanks for the help!

Van Horne Pharmaceuticals' annual stock returns over the previous five years are shown below Year Stock Return 11.8% 80.2% 24.3% 39.8% 58.4% An analyst wants to publish a forecast of next year's stock return and is using this data to guide that guess. What is your best guess for the return in an average, or typical, year? O 11.06% O 10.34% O 10.26% O 10.82% O 10.98% On average, how much has an investment earned per year in Van Horne's stock? In other words, what is the average compound return for Van Hone's stock? O-9.43% O-14.48% O-7.71% 0-689% O-11.81% If an investor put $500 into Van Horne's stock at time period 0, how much would that investment be worth at the end of these five years? O $334.81 O $372.32 $274.38 O $304.66 O $319.75 What is the standard deviation of Van Horne's annual returns over this five-year period? 54.53% 53.04% 53.78% 54.28% 54.78%

Explanation / Answer

year Return 1 0.118 1.118 2 -0.802 0.198 3 0.243 1.243 4 0.398 1.398 5 0.584 1.584 Arithemetic mean 10.82% Geometric mean -9.43% Sumproduct 304.6565189 Standard Deviation 53.78%

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