Referring to Exercise 43, the annual report of Dennis Industries also gave these returns on stockholder equity for the same five-year period (in percent): 13.2, 5.0, 10.2, 17.5, and 12.9.

a. What is the arithmetic mean return?

b. What is the variance?

a. 11.76

b. 21.113

Step-by-step explanation:

x

13.2

5

10.2

17.5

12.9

a)

arithmetic mean=sumx/n

arithmetic mean=(13.2+5+10.2+17.5+12.9)/5=58.8/5=11.76

Thus, the arithmetic mean return is 11.76.

b)

Variance=sum(x-xbar)^2/n-1

x         x-xbar                   (x-xbar)^2

13.2    13.2-11.76=1.44        2.0736

5         5-11.76=-6.76          45.6976

10.2     10.2-11.76=-1.56        2.4336

17.5      17.5-11.76=5.74       32.9476

12.9      12.9-11.76=1.14           1.2996

sum(x-xbar)^2=2.074+45.698+2.434+32.948+1.3=84.452

Variance=84.452/4=21.113

Thus, variance is 21.113.